CMS5, a murine fibrosarcoma, was transduced with the IL-2 gene to stimulate the host antitumor response. Previously, we described that splenocytes isolated from parental tumor bearing (PTB) mice and IL-2-secreting tumor bearing (ITB) mice differed significantly in their proliferative responses when restimulated with IL-2-secreting tumor cells. In this report we extend these results by showing that the inability of PTB cells to proliferate when stimulated with parental CMS5 cells is not corrected by providing a source of costimulation. Furthermore, we demonstrate that T cells from PTB animals exhibit defective signaling through the T-cell receptor, defined by decreased protein tyrosine phosphorylation, that correlates with the impairment of functions attributed to both CD4+ and CD8+ T cells. In contrast, T cells from ITB animals are normal in this regard. The results suggest that immunosuppression underlies functional differences between PTB and ITB splenocytes and that defects in signal transduction may be responsible for the lack of normal functional responses.