To investigate the molecular basis that makes heterodimeric CD8alphabeta a more efficient coreceptor than homodimeric CD8alphaalpha, we used various CD8 transfectants of T1.4 T cell hybridomas, which are specific for H-2Kd, and a photoreactive derivative of the Plasmodium berghei circumsporozoite peptide PbCS 252-260 (SYIPSAEKI). We demonstrate that CD8 is palmitoylated at the cytoplasmic tail of CD8beta and that this allows partitioning of CD8alphabeta, but not of CD8alphaalpha, in lipid rafts. Localization of CD8 in rafts is crucial for its coreceptor function. First, association of CD8 with the src kinase p56lck takes place nearly exclusively in rafts, mainly due to increased concentration of both components in this compartment. Deletion of the cytoplasmic domain of CD8beta abrogated localization of CD8 in rafts and association with p56lck. Second, CD8-mediated cross-linking of p56lck by multimeric Kd-peptide complexes or by anti-CD8 Ab results in p56lck activation in rafts, from which the abundant phosphatase CD45 is excluded. Third, CD8-associated activated p56lck phosphorylates CD3zeta in rafts and hence induces TCR signaling and T cell activation. This study shows that palmitoylation of CD8beta is required for efficient CD8 coreceptor function, mainly because it dramatically increases CD8 association with p56lck and CD8-mediated activation of p56lck in lipid rafts.