To elucidate the process of TCR-mediated signaling pathways in lipid rafts, we constructed a chimeric molecule that localizes activated SHP-1 to rafts. Raft targeting of activated SHP-1 in Jurkat-derived transfectants completely inhibited the expression of CD69 and transcriptional factors after TCR cross-linking. Whereas the inducible tyrosine phosphorylation of TCRζ and ZAP-70 and the kinase activity of Lck were intact, phosphorylated LAT was rapidly dephosphorylated by raft targeting of activated SHP-1, leading to defects in LAT activation and subsequent downstream signaling events. Intriguingly, recruitment of endogenous SHP-1 to rafts and its association with LAT were dramatically increased after TCR engagement, suggesting that SHP-1 is involved in raft-mediated T cell activation.