To identify novel components of the TCR signaling pathway, a large-scale retroviral-based functional screen was performed using CD69 expression as a marker for T cell activation. In addition to known regulators, two truncated forms of p21-activated kinase 2 (PAK2), PAK2DeltaL(1-224) and PAK2DeltaS(1-113), both lacking the kinase domain, were isolated in the T cell screen. The PAK2 truncation, PAK2DeltaL, blocked Ag receptor-induced NFAT activation and TCR-mediated calcium flux in Jurkat T cells. However, it had minimal effect on PMA/ionomycin-induced CD69 up-regulation in Jurkat cells, on anti-IgM-mediated CD69 up-regulation in B cells, or on the migratory responses of resting T cells to chemoattractants. We show that PAK2 kinase activity is increased in response to TCR stimulation. Furthermore, a full-length kinase-inactive form of PAK2 blocked both TCR-induced CD69 up-regulation and NFAT activity in Jurkat cells, demonstrating that kinase activity is required for PAK2 function downstream of the TCR. We also generated a GFP-fused PAK2 truncation lacking the Cdc42/Rac interactive binding region domain, GFP-PAK2(83-149). We show that this construct binds directly to the kinase domain of PAK2 and inhibits anti-TCR-stimulated T cell activation. Finally, we demonstrate that, in primary T cells, dominant-negative PAK2 prevented anti-CD3/CD28-induced IL-2 production, and TCR-induced CD40 ligand expression, both key functions of activated T cells. Taken together, these results suggest a novel role for PAK2 as a positive regulator of T cell activation.