Leucocyte Ig-like receptors (LILR) are a family of innate immune receptors expressed on myeloid and lymphoid cells that influence adaptive immune responses. We identified a common mechanism of alternative mRNA splicing, which generates transcripts that encode soluble protein isoforms of the majority of human LILR. These alternative splice variants lack transmembrane and cytoplasmic encoding regions, due to the transcription of a cryptic stop codon present in an intron 5' of the transmembrane encoding exon. The alternative LILR transcripts were detected in cell types that express their membrane-associated isoforms. Expression of the alternative LILRB1 transcript in transfected cells resulted in the release of a soluble approximately 65 Kd LILRB1 protein into culture supernatants. Soluble LILRB1 protein was also detected in the culture supernatants of monocyte-derived DC. In vitro assays suggested that soluble LILRB1 could block the interaction between membrane-associated LILRB1 and HLA-class I. Soluble LILRB1 may act as a dominant negative regulator of HLA-class I-mediated LILRB1 inhibition. Soluble isoforms of the other LILR may function in a comparable way.