A C3-fragment preparation (C3-FP) was studied for its ability to regulate human peripheral blood lymphocyte activation. It was found that very low concentrations of this low m.w. fraction, which was free of C3a, inhibited the PHA-induced lymphocyte proliferation without any cytotoxicity. Cytofluorometric analysis showed that C3-FP did not influence the transition of T cells from the G0 to the G1a phase of the cell cycle. However, the IL 2-dependent transition from the G1a to the G1b phase of the cell cycle was effectively blocked. Addition of exogenous IL 2 did not release cells arrested in the G1a phase. Furthermore, neither IL 2 production nor IL 2 receptor formation was inhibited by C3-FP, and binding of IL 2 to its receptor was unaltered. It was found that only IL 2-dependent cell lines were inhibited in their proliferation; all other tested cell lines were unaffected by C3-FP. Our findings suggest that cleaved products of C3 may inhibit IL 2-dependent lymphocyte proliferation at a stage where the IL 2 signal is required for initiation of proliferation.