Leukocyte associated Ig-like receptor-1 (LAIR-1) is a surface molecule expressed on human mononuclear leukocytes that functions as an inhibitory receptor on human NK cells. In addition to NK cells, LAIR-1 is expressed on T cells, B cells, macrophages, and dendritic cells. Most cells express two biochemically distinct forms of LAIR-1, which we now show are likely alternative splice variants of the same gene. Cross-linking of LAIR-1 on human T cell clones results in inhibition of cytotoxicity only in T cell clones that lack CD28 and are able to spontaneously lyse certain targets in vitro. Moreover, the cytolytic activity of freshly isolated T cells, which is thought to be mainly due to "effector" T cells, can be inhibited by anti-LAIR-1 mAb. Thus, LAIR-1 functions as an inhibitory receptor not only on NK cells, but also on human T cells. This indicates that LAIR-1 provides a mechanism of regulation of effector T cells and may play a role in the inhibition of unwanted bystander responses mediated by Ag-specific T cells.