CD26 is a T cell activation antigen known to bind adenosine deaminase and have dipeptidyl peptidase IV activity. Cross-linking of CD26 and CD3 with immobilized mAbs can deliver a costimulatory signal that contributes to T cell activation. Our earlier studies revealed that cross-linking of CD26 induces its internalization, the phosphorylation of a number of proteins involved in the signaling pathway, and subsequent T cell proliferation. Although these findings suggest the importance of internalization in the function of CD26, CD26 has only 6 aa residues in its cytoplasmic region with no known motif for endocytosis. In the present study, we have identified the mannose 6-phosphateyinsulin-like growth factor II receptor (M6PyIGFIIR) as a binding protein for CD26 and that mannose 6-phosphate (M6P) residues in the carbohydrate moiety of CD26 are critical for this binding. Activation of peripheral blood T cells results in the mannose 6 phosphorylation of CD26. In addition, the cross-linking of CD26 with an anti-CD26 antibody induces not only capping and internalization of CD26 but also colocalization of CD26 with M6PyIGFIIR. Finally, both internalization of CD26 and the T cell proliferative response induced by CD26-mediated costimulation were inhibited by the addition of M6P, but not by glucose 6-phosphate or mannose 1-phosphate. These results indicate that internalization of CD26 after crosslinking is mediated in part by M6PyIGFIIR and that the interaction between mannose 6-phosphorylated CD26 and M6PyIGFIIR may play an important role in CD26-mediated T cell costimulatory signaling.