CD4 plays an important role in the activation and development of CD4+ T cells. This is mediated via its bivalent interaction with MHC class II molecules and the TCR:CD3 complex through p56lck. Recent studies have implicated a third site of interaction between the membrane-proximal extracellular domains of CD4 and the TCR. Due to these multiple interactions, direct evidence for the functional importance of this extracellular association has remained elusive. Furthermore, the residues that mediate this interaction are unknown. In this study, we analyzed the function of 61 CD4 mutants. Alanine substitution of just 2 residues, either Q114/F182 or F182/F201, which are partially buried and located close to the D2/D3 interface, completely abrogated CD4 function. Direct evidence for the functional importance of TCR:CD4.D3 interaction was obtained using an anti-CD3fos:anti-CD4jun-bispecific Ab. Surprisingly, it induced strong T cell activation in hybridomas transfected with cytoplasmic-tailless CD4, despite the lack of association with either p56lck or MHC class II molecules. However, this effect was completely abrogated with the CD4 mutants Q114A/F182A or F182A/F201A. These data demonstrate that TCR:CD4.D3 interaction can have a profound effect on T cell activation and obviates the need for receptor oligomerization.