We have previously shown that a synthetic peptide containing env residues 581-597 from HIV-1 inhibits lymphoproliferation of human PBMC. We have investigated the molecular mechanism(s) by which this HIV-1-derived peptide inhibits CD3-mediated signal transduction. We show that the peptide containing residues 581-597 from the HIV-1 transmembrane protein gp41 specifically inhibited the intracellular Ca2+ influx in Jurkat cells stimulated by the mAb OKT3 whereas it had no effect on the production of inositol triphosphate. In addition, the peptide inhibited protein kinase C (pkC)-mediated phosphorylation of the CD3 gamma-chain in intact cells and directly inhibited partially purified pkC. The inhibition was noncompetitive with respect to the substrates histone and ATP and independent of the regulatory domain of the enzyme. Furthermore, the peptide required internalization for inhibitory activity because no inhibition of lymphoproliferation was observed when cells were treated with peptide at 4 degrees C. Based on these results obtained with the peptide aa581-597, we postulate that the transmembrane protein gp41 of HIV-1 may inhibit pkC activity and thus block pkC-dependent immune function contributing to the immunosuppression of HIV-1-infected individuals.