Natural killer (NK) cell inhibitory receptors play important roles in the regulation of target susceptibility to natural killing. Here, we report the molecular cloning and functional characterization of a novel NK cell receptor, KLRL1, from human and mouse dendritic cells. KLRL1 is a type II transmembrane protein with an immunoreceptor tyrosine-based inhibitory motif and a C-type lectinlike domain. The KLRL1 gene is located in the central region of the NK gene complex in both humans and mice, on human chromosome 12p13 and mouse chromosome 6F3, adjacent to the other KLR genes. KLRL1 is preferentially expressed in lymphoid tissues and immune cells, including NK cells, T cells, dendritic cells, and monocytes or macrophages. Western blot and fluorescence confocal microscopy analyses indicated that KLRL1 is a membrane-associated glycoprotein, which forms a heterodimer with an as yet unidentified partner. Human and mouse KLRL1 are both predicted to contain putative immunoreceptor tyrosine-based inhibitory motifs (ITIMs), and immunoprecipitation experiments demonstrated that KLRL1 associates with the tyrosine phosphatases SHP-1 (SH2-domain-containing protein tyrosine phosphatase 1) and SHP-2. Consistent with its potential inhibitory function, pretreatment of target cells with human KLRL1-Fc fusion protein enhances NK-mediated cytotoxicity. Taken together, our results demonstrate that KLRL1 belongs to the KLR family and is a novel inhibitory NK cell receptor.