PEGylation of antibodies is known to increase their half-life in systemic circulation, but nothing is known regarding whether PEGylation can improve the inhibitory potency of antibodies against target receptors. In this paper, we have examined this question using antibodies directed to Sialoadhesin (Sn), a macrophage-restricted adhesion molecule that mediates sialic acid dependent binding to different cells. Anti-Sn monoclonal antibodies (mAbs), SER-4 and 3D6, were conjugated to PEG 5 kDa or and PEG 20 kDa, resulting in the incorporation of up to 3 molecules of PEG per mAb molecule. Following purification of PEGylated mAbs by anion exchange chromatography, it was shown that PEGylation had little or no effect on antigen binding activity but led to a dramatic increase in inhibitory potency that was proportional to both the size of the PEG and the degree of derivatization. Thus, PEGylation of antibodies directed to cell surface receptors could be a powerful approach to improve the therapeutic efficacy of antibodies, not only by increasing their half-life in vivo, but also by increasing their inhibitory potency for blocking receptor-ligand interactions.