The Stat1 transcription factor plays a pivotal role in both, the antiviral and antigrowth actions of interferons. Stat1 acquires the ability to bind DNA by becoming phosphorylated on Tyr(701). However, to effectively stimulate gene transcription, it must also be phosphorylated on Ser(727). We show that engagement of T cell antigen receptor (TCR)/CD3 complex in either Jurkat cells or peripheral blood lymphocytes stimulates phosphorylation of Ser(727) but not Tyr(701) of Stat1. This process does not require the expression of tyrosine kinases Lck and Zap-70. Interestingly, pretreatment of T cells with the Src kinase inhibitor PP1 completely abrogated CD3-mediated serine phosphorylation of Stat1, whereas inhibitors to MEK1 and phosphatidylinositol 3-kinase had no effect. Phosphorylation of Ser(727) of Stat1 in T cells is not restricted to TCR/CD3 but also results when cells are stimulated via the costimulatory molecule CD28. The combination of CD3 and CD28 did not augment phosphorylation of Stat1 Ser(727). Surprisingly, Stat1-mediated transcriptional activity in response to IFN-alpha was enhanced with CD3 stimulation, whereas CD3 alone had little effect. These findings suggest that Stat1 is a signaling molecule in TCR signaling and may play a role in T cell function.