CD8+ tumor-infiltrating lymphocytes (TIL) are severely deficient in cytolysis, a defect that may permit tumor escape from immune-mediated destruction. Because lytic function is dependent upon TCR signaling, we have tested the hypothesis that primary TIL have defective signaling by analysis of the localization and activation status of TIL proteins important in TCR-mediated signaling. Upon conjugate formation with cognate target cells in vitro, TIL do not recruit granzyme B+ granules, the microtubule-organizing center, F-actin, Wiskott-Aldrich syndrome protein, nor proline rich tyrosine kinase-2 to the target cell contact site. In addition, TIL do not flux calcium nor demonstrate proximal tyrosine kinase activity, deficiencies likely to underlie failure to fully activate the lytic machinery. Confocal microscopy and fluorescence resonance energy transfer analyses demonstrate that TIL are triggered by conjugate formation in that the TCR, p56 lck, CD3ζ, LFA-1, lipid rafts, ZAP70, and linker for activation of T cells localize at the TIL: tumor cell contact site, and CD43 and CD45 are excluded. However, proximal TCR signaling is blocked upon conjugate formation because the inhibitory motif of p56 lck is rapidly phosphorylated (Y505) and COOH-terminal Src kinase is recruited to the contact site, while Src homology 2 domain-containing protein phosphatase 2 is cytoplasmic. Our data support a novel mechanism explaining how tumor-induced inactivation of proximal TCR signaling regulates lytic function of antitumor T cells.