Polyunsaturated fatty acids (PUFAs) suppress immune responses and inhibit T cell activation through largely unknown mechanisms. The displacement of signaling proteins from membrane lipid rafts has recently been suggested as underlying PUFA-mediated T cell inhibition. We show here that PUFA treatment specifically interferes with T cell signal transduction by blocking tyrosine phosphorylation of LAT (linker for activation of T cells) and phospholipase Cgamma1. A significant fraction of LAT was displaced from rafts by PUFA treatment along with other signaling proteins. However, retaining LAT alone in lipid rafts effectively restored phospholipase Cgamma1/calcium signaling in PUFA-treated T cells. These data reveal LAT displacement from lipid rafts as a molecular mechanism by which PUFAs inhibit T cell signaling and underline the predominant importance of LAT localization in rafts for efficient T cell activation.