ART-1, a cell surface ADP-ribosyltransferase, is imbedded in the membrane by a glycosylphosphatidylinositol anchor. Function of this enzyme in mouse T lymphocytes is to transfer ADP-ribose groups from NAD to arginine residues, exposed on the extracellular domain of cell surface molecules. As a consequence, T cell responses are modulated. To explore the precise action of the enzyme, the T cell lymphoma EL-4 was transfected with the ART-1 gene, and its effects were examined. It is shown that ART-1 ADP-ribosylates distinct cell surface molecules, causing inhibition of T cell receptor signaling, concomitant to suppression of p56(lck) kinase activation. These effects are explained by failure of T cell receptors and co-receptors to associate into a contiguous and functional receptor cluster.