NK cells identify infected, neoplastic, or MHC-disparate target cells via several different receptors. The NK cell receptor KLRE1 lacks known signaling motifs but has nevertheless been shown to regulate NK cell-mediated cytotoxicity. Here we demonstrate that KLRE1 forms functional heterodimers with either KLRI1 or KLRI2. Cotransfection with KLRE1 was necessary for surface expression of the NK cell receptor chains KLRI1 and KLRI2 in 293T cells. Moreover, KLRE1 can be coimmunoprecipitated with KLRI1 or KLRI2 from transfected NK cell lines. By flow cytometry, KLRE1 and KLRI1 showed colinear expression on NK cells, suggesting surface expression as heterodimers. Unlike other killer cell lectin-like receptors, KLRE1/KLRI1 and KLRE1/KLRI2 heterodimers predominantly migrated as single chains in SDS-PAGE, indicating noncovalent association. KLRI1 was coimmunoprecipitated with the tyrosine phosphatase Src homology region 2 domain-containing phosphatase 1. In accordance with an inhibitory function, anti-HA Ab induced reduced killing of FcR-bearing targets by KLRI1-HA-transfected NK cell lines in a redirected cytotoxicity assay. Reciprocally, KLRI2-HA transfectants displayed increased killing in this assay. Finally, Ab to KLRE1 induced inhibition in KLRI1-transfected cells but increased cytotoxicity in KLRI2 transfectants, demonstrating that KLRE/I1 is a functional inhibitory heterodimer in NK cells, whereas KLRE/I2 is an activating heterodimeric receptor.