A T cell antigen receptor (TCR) transmembrane sequence derived peptide (CP) has been shown to inhibit T cell activation both in vitro and in vivo at the membrane level of the receptor signal transduction. To examine the effect of sugar or lipid conjugations on CP function, we linked CP to 1-aminoglucosesuccinate (GS), N-myristate (MYR), mono-di-tripalmitate (LP1, LP2, or LP3), and a lipoamino acid (LA) and examined the effects of these compounds on T cell activation in vitro and by using a rat model of adjuvant-induced arthritis, in vivo. In vitro, antigen presentation results demonstrated that lipid conjugation enhanced CP's ability to lower IL-2 production from 56.99%+/-15.69 S.D. observed with CP, to 12.08%+/-3.34 S.D. observed with LA. The sugar conjugate GS resulted in only a mild loss of in vitro activity compared to CP (82.95%+/-14.96 S.D.). In vivo, lipid conjugation retarded the progression of adjuvant-induced arthritis by approximately 50%, whereas the sugar conjugated CP, GS, almost completely inhibited the progression of arthritis. This study demonstrates that hydrophobic peptide activity is markedly enhanced in vitro and in vivo by conjugation to lipids or sugars. This may have practical applications in drug delivery and bioavailability of hydrophobic peptides.