Crry/p65 is a type I glycoprotein, which protects mouse T cells from complement attack. We have previously shown that complement receptor I-related protein Crry/p65 (Crry) ligation has a costimulatory effect on mouse CD4+ T cell activation. Here, we have examined the mechanisms responsible for Crry costimulation, addressing the question of whether Crry potentiates signal transduction starting at the T cell receptor (TCR)/CD3 complex or promotes distinct costimulatory signals. We show that Crry increases early TCR-dependent activation signals, including p56lck-, zeta-associated protein-70 (ZAP-70), Vav-1, Akt, and extracellular signal-regulated kinase (ERK) phosphorylation but also costimulation-dependent mitogen-activated protein kinases (MAPK), such as the stress-activated c-Jun N-terminal kinase (JNK). It is intriguing that Crry costimulus enhanced p38 MAPK activation in T helper cell type 1 (Th1) but not in Th2 cells. A fraction of Crry is found consistently in the detergent-insoluble membrane fraction of Th1 or Th2 cells or CD4+ lymphoblasts. Crry costimulation induced clustering of lipid rafts, increasing their content in Crry, CD3epsilon, and p59-60 forms of p56lck, and caused actin polymerization close to the site of activation in Th2 cells. Such events were inhibited by wortmannin, suggesting a role for phosphatidylinositol-3 kinase in these effects. The Crry cytoplasmic domain was required for JNK activation and interleukin-4 secretion but not for the presence of Crry in rafts or activation of p56lck, ZAP-70, Akt, Vav-1, or ERK. This suggests that Crry costimulation involves two different but not mutually exclusive signal transduction modules. The dual function of Crry as a complement regulatory protein and as a T cell costimulator illustrates the importance of complement regulatory proteins as links between innate and adaptive immunity.