The Fc epsilon receptor II (Fc epsilon RII/CD23) has been proposed to have multiple functions as a membrane-bound or soluble molecule: a function in B cell growth and differentiation and a role in the effector phase of IgE-mediated immunity. We recently demonstrated the presence of two forms of Fc epsilon RII (Fc epsilon RIIa and Fc epsilon RIIb) whose structures differ only at their N-terminal cytoplasmic regions. The regulatory mechanisms of their expression strongly suggest that Fc epsilon RIIa and Fc epsilon RIIb function in B cells and in the effector cells of IgE-mediated immunity, respectively. To elucidate the function of soluble Fc epsilon RII/CD23 (sFc epsilon RII) the recombinant soluble molecule was produced. This recombinant receptor could competitively block the IgE binding of eosinophils, monocytes and even basophils and could inhibit the IgE-mediated function of effector cells such as monocytes. These findings suggested that sFc epsilon RII could competitively regulate the function of effector cells in IgE-mediated immunity and that the recombinant sFc epsilon RII could be applied clinically for the control of allergic reactions. The expression of Fc epsilon RII on Fc epsilon RII-negative B and T cell lines by cDNA transfection resulted in homocytic aggregation. The function of Fc epsilon RII on B cells as an adhesion molecule was also demonstrated.