It is well established that non-depleting anti-CD4 monoclonal antibodies (mAb) have potent immunomodulatory properties in vivo and as such can induce a profound state of tolerance. Receptor blockade, CD4 modulation, or the transmission of a negative signal have all been proposed to explain their effects, however their precise mechanism of action, particularly at the level of cellular signaling, remains obscure. Experiments were thus carried out to examine the underlying mechanisms of action of two non-depleting anti-mouse CD4 mAb, YTS177 and KT6, which differ in their ability to modulate CD4 expression. The effects of the mAb were examined on CD4(+) T cells derived from D0.11.10 TCR transgenic mice. Functional studies revealed that both mAb could effectively block antigen-driven proliferation and IL-2 production but had only modest effects at higher peptide doses. Importantly, mAb pre-treatment of T cells stimulated by sub-optimal peptide seemed to induce an anergy-like state making them unresponsive to subsequent re-stimulation. Analysis of intracellular signaling demonstrated that certain key upstream events such as the phosphorylation of Zap-70 and LAT were also blocked by mAb pretreatment which may be due to interference with stable T cell-APC conjugate formation.