Membrane gangliosides appear to modulate signal transduction by several growth factor receptors. We have investigated the possible regulation of IL-2-induced proliferation signals by gangliosides. Low concentrations of cholera toxin B subunit (CT-B), which binds specifically to GM1 ganglioside, greatly inhibited IL-2-stimulated DNA synthesis in the IL-2-dependent cell line CTLL-2, but had no effect on proliferation of HT-2. GM1 levels proved to be very low in HT-2 compared to CTLL-2. Large increases in membrane-associated GM1 could be achieved in both cell lines by incubation with exogenous GM1, resulting in a high degree of inhibition of proliferation by CT-B for both CTLL-2 and HT-2. Inhibition was blocked by large unilamellar vesicles containing GM1, but not by vesicles of lipid alone. The time course of CT-B inhibition for CTLL-2 synchronized in G0-G1, indicated that the negative growth signal acts relatively early in the IL-2 activation pathway. CT-B did not affect binding of IL-2 to high-affinity IL-2r. The inhibitory effects of CT-B could not be reversed by pertussis toxin, suggesting that a G protein is probably not involved. These results show that CT-B binding to either endogenous or inserted GM1 can modulate IL-2-induced lymphocyte proliferation.