CD8+ T cell tolerance to self-proteins prevents autoimmunity but represents an obstacle to generating T cell responses to tumor-associated antigens. We have made a T cell receptor (TCR) transgenic mouse specific for a tumor antigen and crossed TCR-TG mice to transgenic mice expressing the tumor antigen in hepatocytes (gag-TG). TCRxgag mice showed no signs of autoimmunity despite persistence of high avidity transgenic CD8+ T cells in the periphery. Peripheral CD8+ T cells expressed phenotypic markers consistent with antigen encounter in vivo and had upregulated the antiapoptotic molecule Bcl-2. TCRxgag cells failed to proliferate in response to antigen but demonstrated cytolytic activity and the ability to produce interferon gamma. This split tolerance was accompanied by inhibition of Ca(2+) flux, ERK1/2, and Jun kinase phosphorylation, and a block in both interleukin 2 production and response to exogenous interleukin 2. The data suggest that proliferation and expression of specific effector functions characteristic of reactive cells are not necessarily linked in CD8+ T cell tolerance.