During T cell activation, CD4 is intimately involved in colocalizing the T cell receptor (TCR) with its specific peptide ligand bound to class II molecules of the major histocompatibility complex (MHC). Previously, the COOH-terminal residues, Trp62/63, which flank the immunodominant epitope of hen egg lysozyme (HEL 52-61), were shown to have a profound effect on TCR recognition. CD4 maintains the fidelity of this interaction when short peptides are used. To determine which portion of CD4 was responsible for this effect, a series of CD4 mutants were made and transfected into CD4 loss variants of two HEL 52-61-specific T cell hybridomas. Surprisingly, some CD4 mutants that failed to interact with MHC class II molecules (D2 domain mutant) or with p56kk (cytoplasmic-tailless mutant) restored responsiveness. Nevertheless, a significant reduction in association between cytoplasmic-tailless CD4 and the TCR, as determined by fluorescence resonance energy transfer, was observed. Thus, neither colocalization of CD4 and the TCR nor signal transduction via CD4 was solely responsible for the functional restoration of these T cell hybridomas by wild-type CD4. However, substitution of the two membrane proximal domains of murine CD4 (D3 and D4) with domains from human CD4 or intercellular adhesion molecule 1 not only abrogated its ability to restore function, but also substantially reduced its ability to associate with the TCR. Furthermore, the mouse/human CD4 chimera had a potent dominant negative effect on T cell function in the presence of equimolar concentrations of wild-type CD4. These data suggest that the D3/D4 domains of CD4 may interact directly or indirectly with the TCR-CD3 complex and influence the signal transduction processes. Given the striking structural differences between CD4 and CD8 in this region, these data define a novel and unique function for CD4.