CD5 is a key regulator of Ag receptor-mediated activation, selection, and differentiation in both T and B cells. Accumulating evidence indicates that lymphocyte activation and selection are sensitive to variations in levels of CD5 on the cell surface. We now show that CD5 expression on the surface of B and T cells is regulated posttranslationally by direct interaction with the mu(2) subunit of the AP2 adaptor complex that links transmembrane proteins to clathrin-coated pits. CD5 is rapidly internalized from the cell surface in lymphoid cell lines, mature splenic T and B cells, and peritoneal CD5(+) B cells following monovalent or bivalent ligation of the receptor. We mapped the mu(2) subunit binding site on CD5 to Y(429) and determined that the integrity of this site was necessary for CD5 internalization. Cross-linking of the Ag receptor with intact Abs inhibited CD5 internalization in B cells, but had the opposite effect in T cells. However, if F(ab')(2) Abs were used to stimulate the Ag receptor in B cells, the effect on CD5 internalization was now similar to that observed in T cells, indicating that signals through the Ag receptor and FcR regulate CD5 endocytosis in B cells. This was confirmed using an FcgammaRIIB1-deficient B cell line. The ability to differentially alter posttranslational CD5 expression in T and B cells is likely to be key in regulation of Ag receptor signaling and generation of tolerance in T and B lymphocytes.