Although cholera toxin B subunit is a potent mucosal immunogen in vivo, its predominant effect in vitro is inhibition of T cell and B cell activation. We reported earlier that this inhibition was not mediated through activation of adenylate cyclase and increases in intracellular cAMP. There is increasing evidence that T cell activation is initiated through the phosphatidyl inositol second messenger system in which phosphatidyl inositol bisphosphate is hydrolyzed by phospholipase C, producing inositol trisphosphate (IP3) and diacylglycerol. IP3 increases cytosolic calcium and diacylglycerol binds, translocates, and activates protein kinase C (PKC). These signals lead to a complex series of events eventuating in activation of a number of genes important in cell proliferation. In this study, we asked whether the mechanism of T cell inhibition by B subunit of cholera toxin (CT- B) was due to interference with the phosphatidyl inositol second messenger system. We found that substitution of ionomycin and PMA for IP3 and diacylglycerol, respectively, in culture induced T cell proliferation but only if both were present simultaneously. Such proliferation was inhibited by CT-B even if added hours after the start of culture. An assay for cytosolic PKC activity demonstrated that PMA translocation of PKC from cytosol to membrane was not inhibited by CT-B, indicating that CT-B does not inhibit activation of PKC. There was no inhibition of Con A-stimulated T cell phosphoinositol turnover. Moreover, Con A added to Fura-2 AM-loaded cells caused a rapid rise in cytosolic calcium, which CT-B preincubation did not alter. These results indicate that CT-B did not inhibit IP3 generation or action. We next looked at expression of genes involved in T cell proliferation. CT-B inhibited the production of IL-2 by mitogen-activated T cells; Northern analysis showed that this inhibition was associated with decreased levels of IL-2 mRNA. Expression of IL-2R and of transferrin receptors was only modestly reduced. Despite the presence of IL-2R on the T cells exposed to CT-B, the addition of exogenous IL-2 to the cultures did not reverse the CT-B-induced T cell inhibition. We conclude that the T cell inhibition by CT-B is not mediated by interference with the activation of the phosphatidylinositol second messenger system but occurs at a later stage of T cell activation.