Shedding of gangliosides from tumor cells may regulate immune responses in cancer. A major mechanism of T-cell immunosuppression by gangliosides in vitro entails blocking of the interaction of interleukin-2 (IL-2) with its receptor; however, its involvement in immune suppression by gangliosides shed by tumor cells is not known. A model system was developed for assessing inhibition of IL-2-stimulated T-cell proliferation by components shed from murine YAC-1 lymphoma. Gangliosides shed by YAC-1 into the culture medium were present mainly in micellar form. YAC-1 supernatant suppressed both DNA synthesis and cellular growth in HT-2, while DNA synthesis in lymphokine-independent cell lines was unaffected. The immunosuppressive activity of YAC-1 supernatant was evident early in the IL-2 signaling pathway, and it had no permanent effect on proliferative capacity of the cells. Inhibition of DNA synthesis was reversed by high levels of IL-2, and YAC-1 supernatants blocked binding of [125I]IL-2 to high-affinity IL-2 receptors. Taken together, these data suggest that one mechanism by which ganglioside micelles shed from YAC-1 exert their immunosuppressive effects on T-cells involves blocking the IL-2/IL-2 receptor system.