The CD2 receptor on T-lymphocytes plays a major part in mediating adhesive interactions via the LFA-3 ligand and in transducing signals for lymphocyte activation. In this study the expression, function, and internalization of the CD2 receptor was investigated in resting and activated murine T-cells. Surface iodination of intact lymphocytes showed that both types of cell expressed this antigen as a single polypeptide of 63 KDa, and flow cytometry analysis demonstrated that there was four times as much CD2 on lymphoblasts as on resting cells. Moreover, the CD2 receptor had a more prominent role in the adhesion of the activated lymphocytes to extravascular cells than in the binding of resting cells. Only activated lymphocytes internalized CD2, in the presence or absence of the anti-CD2 monoclonal antibody (mAb) 12-15, more than 80% of the 12-15/CD2 complex being removed from the cell surface within 24 hr. Application of 125I-labelled mAb 12-15 followed by subcellular fractionation on Percoll gradients showed that the complex was internalized initially into a low-density compartment and subsequently transported to heavy-density organelles, in which it was degraded. Immunogold electron microscopy revealed that immediately after the initial binding of mAb 12-15 to the lymphoblasts, the gold particles were localized in clusters exclusively at the plasma membrane. After a short period of culture, the mAb 12-15/CD2 complex was detected in small vesicles near the cell surface. Immunogold staining for a lysosomal enzyme beta-glucuronidase (Gus), for the lysosomal membrane protein LAMP-1, and for the mannose 6-phosphate targetting receptor (MPR) showed that the complex was transported from the endosomal compartment to lysosomal organelles in the activated T-cell. Although mAb 12-15 bound to CD2 in resting T-lymphocytes, in these cells the complex remained associated with the plasma membrane compartment only, even after prolonged culture. These data show that activated but not resting lymphocytes endocytosed the receptor, thereby regulating the expression of this antigen at the plasma membrane. This suggests that the endocytic and lysosomal compartments of lymphocytes have major roles in immune functions, by controlling the level of receptors at the lymphocytes cell surface and thus their response to cytokines and inflammatory mediators as well as their direct interaction with other cells.