The T cell receptor (TCR) is internalized following activation of protein kinase C (PKC) via a leucine (Leu)-based motif in CD3gamma. Some studies have indicated that the TCR is recycled back to the cell surface following PKC-mediated internalization. The functional state of recycled TCR and the mechanisms involved in the sorting events following PKC-induced internalization are not known. In this study, we demonstrated that following PKC-induced internalization, the TCR is recycled back to the cell surface in a functional state. TCR recycling was dependent on dephosphorylation of CD3gamma, probably mediated by the serine/threonine protein phosphatase-2A, but independent on microtubules or actin polymerization. Furthermore, in contrast to ligand-mediated TCR sorting, recycling of the TCR was independent of the tyrosine phosphatase CD45 and the Src tyrosine kinases p56(Lck) and p59(Fyn). Studies of mutated TCR and chimeric CD4-CD3gamma molecules demonstrated that CD3gamma did not contain a recycling signal in itself. In contrast, the only sorting information in CD3gamma was the Leu-based motif that mediated lysosomal sorting of chimeric CD4-CD3gamma molecules. Finally, we found a correlation between the phosphorylation state of CD3gamma and T cell responsiveness. Based on these observations a physiological role of CD3gamma and TCR cycling is proposed.