CD20 is a B cell-specific surface antigen that is thought to play an important role in B cell activation and proliferation, possibly by functioning as a calcium channel or interacting with other cell surface molecules important in B cell signal transduction, such as CD40. In this study, it was found that stimulation through CD40 caused a dramatic decrease in the expression of surface CD20 in normal human B lymphocytes. Down-regulation of CD20 was time and ligand concentration dependent, beginning as early as 15 min after incubation with CD40 ligand-transfected fibroblasts. The rapid onset of this effect in the presence of stable steady-state mRNA levels suggests that CD20 down-regulation occurs at a nontranscriptional level. Confocal fluorescent microscopy indicates that CD20 and CD40 are internalized upon CD40 activation. Specifically, CD20 translocates into lipid rafts and is internalized into cytoplasmic vesicles, in a process that is inhibited by cytochalasin B and protein kinase C antagonists. Paradoxically, one functional consequence of CD20 down-regulation was enhanced calcium signaling upon CD20 cross-linking. These observations support the notion that CD20 engages downstream signaling pathways that alter calcium homeostasis rather than functioning as a calcium channel itself, such signal transduction is enhanced upon CD20 internalization, and CD40 is a regulator of CD20-mediated signaling.