CD8(+) tumor infiltrating T cells (TIL) lack effector-phase functions due to defective proximal TCR-mediated signaling previously shown to result from inactivation of p56(lck) kinase. We identify a novel interacting partner for p56(lck) in nonlytic TIL, Protocadherin-18 ('pcdh18'), and show that pcdh18 is transcribed upon in vitro or in vivo activation of all CD8(+) central memory T cells (CD44(+)CD62L(hi)CD127(+)) coincident with conversion into effector memory cells (CD44(+)CD62L(lo)CD127(+)). Expression of pcdh18 in primary CD8(+) effector cells induces the phenotype of nonlytic TIL: defective proximal TCR signaling, cytokine secretion, and cytolysis, and enhanced AICD. pcdh18 contains a motif (centered at Y842) shared with src kinases (QGQYQP) that is required for the inhibitory phenotype. Thus, pcdh18 is a novel activation marker of CD8(+) memory T cells that can function as an inhibitory signaling receptor and restrict the effector phase.