A number of alternatively spliced epsilon transcripts have been detected in IgE-producing B cells, in addition to the mRNAs encoding the classical membrane and secreted IgE heavy (H) chains. In a recent study, we examined the protein products of three of these alternatively spliced isoforms and found that they are intracellularly retained and degraded because of their inability to assemble into complete IgE molecules. We have now similarly examined a more recently described epsilon mRNA species that is generated by splicing between a donor splice site immediately upstream of the stop codon in the H-chain constant region exon 4 (CH4) and an acceptor site located in the 3' part of the second membrane exon. We show that this isoform is efficiently secreted by both plasma cells and B lymphocytes and therefore represents a second secreted IgE isoform (epsilon S2). The epsilon S2 H chain is only six amino acids longer than the classical secreted Ig H chain (epsilon S1) and contains a C-terminal cysteine, which is a characteristic sequence feature of mu and alpha H chains. However, unlike IgM and IgA, the epsilon S2 C-terminal cysteine (Cys-554) does not induce polymerization of H2L2 molecules (where L is light chain), but rather creates a disulfide bond between the two H chains that increases the rate of association into covalently bound H2L2 monomers. This C-terminal cysteine also does not function as an intracellular retention element because the epsilon S2 isoform was secreted in amounts equal to that of the epsilon S1, both in B lymphocytes and in plasma cells. The epsilon S2 H chains secreted by B lymphocytes differed from the epsilon S1 H chains in the extent of glycosylation. Interestingly, a difference in glycosylation between B-lymphocytes and plasma cells was also noted for both isoforms. The presence of the Cys-554 also allowed the identification of a distinctive asymmetric pathway of IgE assembly, common to both types of epsilon H chains.