Studies involving Toll-like receptor 3 (TLR3)-deficient mice suggest that this receptor binds double-stranded RNA. In the present study, we analyzed ligand/receptor interactions and receptor-proximal events leading to TLR3 activation. The mutagenesis approach showed that certain cysteine residues and glycosylation in TLR3 amino-terminal leucine-rich repeats were necessary for ligand-induced signaling. Furthermore, inactive mutants had a dominant negative effect, suggesting that the signaling module is a multimer. We constructed a chimeric molecule fusing the amino-terminal ectodomain of TLR3 to the transmembrane and carboxyl terminal domains of CD32a containing an immunoreceptor tyrosine-based motif. Expression of TLR3-CD32 in HEK293T cells and the myeloid cell line U937 resulted in surface localization of the receptor, whereas the nonrecombinant molecule was intracellularly localized. The synthetic double-stranded RNAs poly(I-C) and poly(A-U) induced calcium mobilization in a TLR3-CD32 stably transfected U937 clone but not in control cells transfected with other constructs. An anti-TLR3 antibody also induced Ca(2+) flux but only when cross-linked by a secondary anti-immunoglobulin antibody, confirming that multimerization by the ligand is a requirement for signaling. The inhibitors of lysosome maturation, bafilomycin and chloroquine, inhibited the poly(I-C)-induced biological response in immune cells, showing that TLR3 interacted with its ligand in acidic subcellular compartments. Furthermore, TLR3-CD32 activation with poly(I-C) was only observed within a narrow pH window (pH 5.7-6.7), whereas anti-TLR3-mediated Ca(2+) flux was pH-insensitive. The importance of an acidic pH for TLR3-ligand interaction becomes critical when using oligomeric poly(I-C) (15-40-mers). These observations demonstrate that engagement of TLR3 by poly(I-C) at an acidic pH, probably in early phagolysosomes or endosomes, induces receptor aggregation leading to signaling.