Using the monoclonal antibody C1.7, which recognizes a signaling, membrane-bound molecule on human NK and a proportion of CD8(+) T cells, we cloned a novel molecule we refer to as NK cell activation-inducing ligand (NAIL). It is a 365-amino acid protein that belongs to the immunoglobulin-like superfamily with closest homology to murine 2B4, and human CD84 and CD48. Using a soluble NAIL-Fc fusion protein, we determined the counterstructure for NAIL, CD48, which it binds with high affinity. Stimulation of human B cells with recombinant NAIL in the presence of a suboptimal concentration of human CD40 ligand or IL-4 resulted in increased proliferation. Treatment of human dendritic cells with soluble NAIL-leucine zipper protein resulted in an increased release of IL-12 and TNF-alpha. Using recombinant CD48 protein, we demonstrated the ability of this molecule to increase NK cell cytotoxicity and induce IFN-gamma production. We also showed that 2B4 binds to mouse CD48, suggesting that interaction of these receptors may play a similar role in both species. Taken together these results indicate that the NAIL-CD48 interaction may be an important mechanism regulating a variety of immune responses.