Ligation of the V7 (CD101) molecule on T cells with anti-V7 mAb blocks TCR/CD3-induced proliferation by inhibiting IL-2 transcription. To explore the basis for this observation, we analyzed the effects of V7 ligation on CD3/TCR-induced changes in intracellular free Ca2+ and Ca2+-dependent nuclear factor of activated T cells (NF-AT) translocation to the nucleus, which is required for IL-2 transcription. T cells exposed to anti-V7 mAb fluxed Ca2+ transiently, but did not flux Ca2+ in response to subsequent treatment with anti-CD3; however, they recovered the capacity to flux Ca2+ after treatment with pervanadate, indicating that tyrosine dephosphorylation of a critical V7-related substrate is required in the desensitization process. One such substrate, phospholipase C (PLC)-gamma1, becomes tyrosine phosphorylated on CD3/TCR activation and mediates inositol triphosphate-dependent Ca2+ flux. Co-cross-linking of T cells with anti-CD3 and anti-V7 resulted in selective inhibition of PLC-gamma1 tyrosine phosphorylation, which may explain V7-mediated blockade of anti-CD3-induced Ca2+ flux. Moreover, anti-CD3-induced binding of transcription factors to a consensus NF-AT-binding oligonucleotide, which is dependent on Ca2+, was blocked completely by treatment of the cells with anti-V7, whereas binding to a consensus-activating protein-1 oligonucleotide was unaffected. Western blot analysis of cytoplasmic and nuclear extracts confirmed that anti-V7 prevented nuclear translocation of NF-ATc induced by anti-CD3. We conclude that V7 ligation interferes with T cell activation and IL-2 secretion through a Ca2+ and tyrosine kinase-dependent pathway that inhibits PLC-gamma1 phosphorylation and prevents NF-AT translocation to the nucleus.