The expression of TNF-alpha receptors (TNFR) was examined on a CD4+ T cell hybridoma, transformed T cell lines, CTL clones, and activated T cells from peripheral blood to determine the basis of the immunomodulatory activity of TNF on T cell function. Analyses by ligand cross-linking and competitive binding assays with mAb to the 80-kDa receptor (TNFR-I), demonstrated that the TNFR-I was the predominant receptor expressed on activated CD4+ and CD8+ T cell subsets. However, on T cell leukemic lines, a second, non-TNFR-I binding site was identified, most likely the 55-kDa form (TNFR-II). Additional subsets of T cells were readily distinguished by their expression of TNFR-I and related members of the TNFR gene family (CD40 and CD27). Expression of the TNFR-I was dependent upon the state of T cell activation. Signaling through the TCR for Ag or IL-2R was sufficient to induce TNFR mRNA and protein expression in resting T cells. Multiple sizes of TNFR-I transcripts were detected during T cell activation; however, biosynthetic studies showed these multiple species encode a single protein of 80 kDa. These results, combined with the known ability of TNF to induce IL-2R expression, indicate that TNF and IL-2 form a reciprocating receptor amplification circuit. In contrast, differentiated effector T cells triggered through the TCR or protein kinase C initiated a rapid down-regulation (transmodulation) of the TNFR-I that preceded TNF or lymphotoxin secretion. The mechanism of transmodulation involved proteolytic processing of the mature 80-kDa receptor releasing a soluble 40-kDa fragment. This indicates that a TNF autocrine loop is not likely to form during the response of an effector T cell. Collectively, these results suggest that transcriptional and post-translational modification of the TNFR-I are important control points regulating the expression of this receptor during T cell activation.