CTL and NK cells share a common cytolytic mechanism that involves regulated exocytosis of lytic molecules stored within cytoplasmic granules. Here we describe the processing, subcellular localization, and function of a T and NK cell-specific granule protein that shares homology with small, lytic granule-associated molecules. The gene coding for this protein, 519, is expressed late after T cell activation. Antisera raised against a 519/glutathione-S-transferase fusion protein and a series of peptides derived from the 519 protein sequence permitted the identification of two small CTL protein products of 15 and 9 kDa that are exocytosed after stimulation through the TCR. The 9-kDa product is a processed form of 519 and differs from the 15-kDa product in both its amino and carboxyl terminus. While both 519 proteins are found in cytoplasmic granules, the 9-kDa form is also present in dense, highly cytolytic granules. Functional studies indicate that this protein is lytic against tumor cell targets. The cell type- and stage-specific expression pattern of 519 along with its subcellular localization are reminiscent of molecules that play a vital role in granule-mediated cytolysis by CTL and NK cells. Its lytic activity suggests the involvement of 519 in CTL effector function.