Abstract Signaling through the T cell receptor (TCR) mediates T cell activation, differentiation, and proliferation. Previous microscopy studies have shown the spatial reorganization of signaling molecules into microclusters on the plasma membrane after TCR activation. However, how microclusters form and what roles these structures play in signal transduction remain unclear. Importantly, direct comparison of the biochemical activities of signaling molecules in the clustered versus unclustered state has been lacking. Here, we address these questions by reconstituting a TCR signaling pathway in vitro with 12 purified proteins, beginning with TCR phosphorylation and culminating in actin polymerization. We show that upon initiation of phosphorylation, multivalent protein-protein interactions drive the phase separation of signaling molecules into microclusters that display liquid-like properties. These clusters enrich kinases but exclude phosphatases, thus sustaining protein phosphorylation. We also directly demonstrate that the reorganization of actin regulatory proteins into these clusters substantially enhances actin filament assembly at the membrane. These results establish that microclusters create unique physical and biochemical environments that promote reactions in TCR signaling. The principles revealed here likely apply to other systems that exploit phase separation to regulate biochemical reactions on membranes, in the cytoplasm, or the nucleus. Citation Format: Xiaolei Su, Jon Ditlev, Enfu Hui, Sudeep Banjade, Julia Okrut, Jack Taunton, Mike Rosen, Ron Vale. Phase separation of signaling molecules promotes T cell receptor signal transduction. abstract. In: Proceedings of the CRI-CIMT-EATI-AACR Inaugural International Cancer Immunotherapy Conference: Translating Science into Survival; September 16-19, 2015; New York, NY. Philadelphia (PA): AACR; Cancer Immunol Res 2016;4(1 Suppl):Abstract nr A087.