Two peptide segments designated LLP1 (residues 828-855) and LLP2 (residues 768-788) of the HIV-1 transmembrane (TM) envelope protein display structural and functional properties of calmodulin (CaM) binding. These LLP segments may contribute to cytopathogenesis by binding cellular CaM and inhibiting normal CaM-regulated signal transduction pathways. To determine whether these peptides could interrupt signal transduction in vivo, a cellular assay which uses a reporter gene linked to the nuclear factor of activated T cells (NF-AT) was used. Signal transduction perturbation was tested by exogenous addition of LLPs, W-7 or ionomycin; the LLPs inhibited NF-AT-mediated signal transduction as measured by reduced reporter activity. The LLP inhibition profile of NF-AT-driven luciferase activity was similar to the CaM inhibitor W-7. This was in direct contrast to ionomycin, a mobile calcium ion carrier which caused a significant increase in luciferase activity. These findings are consistent with the hypothesis that the CaM-binding properties of TM may contribute to defects in signal transduction leading to the T-cell anergy observed in patients infected with HIV-1.