CD4 functions to enhance T cell activation by increasing intercellular adhesion and/or by transduction of an intracellular signal. To study the role of human CD4 in T cell activation we have used a murine T cell hybridoma, By155.16, which produces IL-2 when stimulated by HLA-DR-bearing cells. Previously, we have shown that expression of human CD4 by this hybridoma enhances its ability to produce IL-2 in response to HLA-DR-bearing cells. Furthermore, deletion of the majority of the cytoplasmic domain renders CD4 less efficient at enhancing IL-2 production. We describe studies of a glycolipid-anchored mutant of the CD4 molecule, CD4PI. This mutant is composed of the entire extracellular domain of CD4 anchored to the outer leaflet of the membrane via a covalent bond to glycosylphosphatidylinositol and, therefore, has no transmembrane or cytoplasmic domains. When expressed in By155.16, CD4PI shows no defect in its ability to increase intercellular adhesion but is unable to augment IL-2 production. These results clearly demonstrate that CD4 enhances T cell activation by mechanisms other than increasing intercellular adhesion.