CD23 (low affinity IgE receptor, FcepsilonRII) is expressed as a Type II extracellular protein on a variety of cells such as B cells, monocytes and macrophages and is cleaved from the cell surface to generate several distinct fragments. The expression of CD23 on the cell surface as well as the generation of soluble fragments of CD23 has been shown to be involved in regulation of IgE synthesis. CD23 is released from the cell surface by a metalloprotease, analogous to the cleavage of other cell surface molecules such as TNF-alpha. This activity has been extensively studied with respect to biochemical characterization and ability to cleave specific mutants of CD23. Both local sequence and distal domains have been shown to affect cleavage of CD23. Selective dipeptide hydroxamic acid inhibitors of CD23 processing have been identified and demonstrated to very potently and selectively inhibit CD23 processing.