CTLA-4 (CD152), high-avidity receptor for CD80 and CD86, is a powerful regulator of T cell activation. While CTLA-4 functions at the cell surface, it is primarily localized in intracellular vesicles and cycles to the cell surface. The CTLA-4 cytoplasmic domain contains sequences that direct its intracellular localization and regulate its signaling. Here we demonstrate that effector molecules involved in receptor trafficking and signaling interact with distinct, but overlapping, sequences in the CTLA-4 cytoplasmic domain. Using the yeast two-hybrid method, we demonstrate association of the mu2 subunit of AP-2, the clathrin-associated complex found in plasma membrane-associated coated pits, with the cytoplasmic tail of CTLA-4, but not CD28. The mu1 subunit of AP-1, found in Golgi-associated coated pits, associated with neither CTLA-4 nor CD28. Sequences required for interaction of mu2 and CTLA-4 were localized to residues, 161TTGVY in CTLA-4; this sequence is N-terminal to, but overlaps with, a previously identified SH2 binding motif, 165YVKM, involved in CTLA-4 signaling. Mu2 interacted preferentially with CTLA-4 when residue 165Y was nonphosphorylated, whereas a PI3 kinase SH2 domain interacted preferentially when 165Y was phosphorylated. In co-transfection experiments, both tyrosine residues in the cytoplasmic tail of CTLA-4 (165Y and 182Y) were phosphorylated by the T lymphocyte-associated tyrosine kinase, p56lck. Thus, phosphorylation of CTLA-4 residue 165Y may reciprocally regulate signaling and trafficking of CTLA-4 by determining which effector molecules bind to its cytoplasmic tail.