Purified human C3 was studied for its ability to regulate human peripheral blood lymphocyte activation in a serum-free tissue culture system. C3 and its fragments formed by trypsin digestion were not mitogenic. However, C3 inhibited both mitogen- and antigen-induced lymphocyte proliferation in a dose-related manner. The observed inhibition by C3 increased with an increase in the dose of mitogen, with 50% inhibition seen at a C3 dose of 2.5 to 25 microgram/ml. Inhibition was induced even when C3 was added at 69 hr in a 99-hr culture, suggesting an effect on late events in activation. The inhibition was not mediated through generalized cytotoxicity, was not an artifact of kinetic alteration and still occurred in macrophage-depleted cultures. A small m.w. fragment of C3 which contained the inhibitory capacity in our C3 preparation was similar to C3a in size, anaphylatoxin activity, heat and acid stability and inhibition by serum. Our results indicate that cleavage products by C3 may play a negative role in lymphocyte activation.