The adhesion molecule CD58 is natively expressed in both a glycosylphosphatidylinositol (GPI)-anchored form and a transmembrane form. We previously demonstrated that the two isoforms of CD58 are differentially distributed in the cell membrane. The GPI-linked form resides in lipid rafts while the transmembrane form resides outside lipid rafts. Following cross-linking a fraction of transmembrane CD58 redistributes to lipid rafts. It has also been demonstrated that ligand binding to CD58 induces biological functions such as cytokine production and immunoglobulin isotype switching, indicating that cell-cell interactions result in CD58-mediated signal transduction. However, the signaling pathways involved in these activation processes are poorly defined. Here we show for the first time that cross-linking of CD58 induces protein tyrosine phosphorylation of BLNK, Syk and PLCgamma, and activation of ERK and Akt/PKB. In addition, we studied how these signaling events relate to the distinct membrane localization of the two isoforms of CD58. We demonstrate that cross-linking of CD58 triggers signaling that is predominantly associated with transmembrane CD58 in nonraft microdomains. Moreover, signaling through transmembrane CD58 does not depend on coexpression of the GPI-linked isoform. Thus, despite the residence of its GPI-anchored isoform in lipid rafts and the translocation of a fraction of its transmembrane isoform to lipid rafts, CD58 signaling is triggered by the transmembrane isoform outside lipid rafts. These findings corroborate signaling outside lipid rafts, as opposed to the established notion that rafts function as essential platforms for signaling.