Cancers are antigenic and recruit CD8+ T cells into the tumor tissue, referred to as ''TIL'' for tumor infiltrating lymphocytes. However, antitumor T cells are dysfunctional and are defective in cytolysis. Since exocytosis of lytic granules from T cells may potentially be dependent upon Immune Synapse (IS) formation and non-lytic tumor infiltrating lymphocytes (TIL) cannot exocytose granules, we considered that TIL IS formation or function is defective. Therefore, in conjugates formed between TIL and cognate tumor cells, using a combination of confocal microscopy and biochemical assays, we investigated the localization and activation status of proteins important in signal transduction, IS formation, and lytic function. Signal transduction in freshly-isolated, non-lytic TIL is defective: they do not flux calcium, activate PLCI?-1, increase protein tyrosine phosphorylation, or recruit WASp, Pyk-2, F-actin and the microtubule organizing center (MTOC) to the target contact site (CS) formed between TIL and cognate target cells. The block in signaling is proximal since LAT is not phosphorylated and ZAP70, although recruited to the CS, is only weakly activated. Importantly, the inhibitory motif in p56lck (Y505) becomes rapidly phosphorylated upon binding to cognate tumor cells. Consistent with a proximal signaling defect, Csk is recruited to the plasma membrane and Shp-2 is retained in the cytoplasm. In addition, Shp-1 localizes at the CS where it may mediate de-activation of various SH3-containing proteins (such as ZAP70) therein preventing propagation of the activation signal. Furthermore, we showed that upon contact with cognate target cells, non-lytic TIL assemble many signaling components (TCRI?I?, CD3I?, p56lck, ZAP70, LFA-1, LAT, and lipid rafts) with kinetics typical of activated CD8+ T cells, showing that non-lytic TIL are triggered by conjugate formation. However, CD2, the CD3 complex, and CD8, which associate with the TCR prior to conjugate formation, rapidly dissociate and are excluded from the CS. Tumor-induced disruption of T cell activation at a point downstream of triggering, therein blocking proximal tyrosine kinase activity, calcium flux, and dependent lytic function, is a novel mechanism for inhibition of the CD8+ T cell effector phase. Collectively our data suggests that proximal TCR-mediated signaling in non-lytic TIL is rapidly blocked after conjugation with cognate tumor target cells. The signaling defect likely is mediated by tumor-induced enhanced Shp-1 activity in TIL which prevents activation of proximal tyrosine kinase activity, affinity upregulation of LFA-1, and calcium flux ultimately preventing exocytosis of lytic granules and lysis of tumor cells. Importantly, the TIL lytic defect is an acquired property restricted to T cells within the tumor microenvironment since in vivo systemic T cell function is not affected by tumor growth whereas TIL are characterized by the inability to mobilize the MTOC to the CS and exocytose lytic granules. Acquired transient lytic defects in TIL have also been described in several transgenic TCR mouse tumor models. Consideration of the observation that human TIL are antigen-specific but non-lytic, together with our description of defective lytic function of murine TIL, supports the notion that tumor-induced inhibition of TIL lytic function may be a common characteristic which may contribute to tumor growth in the presence of antitumor immune response. Tumor-induced lytic dysfunction also may restrict T cell based immunotherapy of cancer. Current research investigates the detailed biochemical basis of the tumor-induced profound defect in T cell signaling.