NK cells selectively kill target cells that fail to express self-MHC class I molecules. This selective killing results from a balance between inhibitory NK receptors specific for MHC class I molecules and activating receptors that are still largely unknown. Isolation of molecular clones for the human killer cell inhibitory receptors (KIR) revealed that KIR consist of a family of molecules with Ig ectodomains and cytoplasmic tails of varying length. Soluble complexes of KIR and HLA-C molecules established that KIR recognizes and binds to its ligand as an autonomous receptor. A functional expression system in human NK clones demonstrated that a single KIR can provide both recognition of MHC class I and delivery of a dominant negative signal to the NK cell. Functional evidence has been obtained for a role of the tyrosine phosphatase SHP-1 in KIR-mediated inhibition. The presence of a conserved motif used to recruit and activate SHP-1 in the cytoplasmic tail of KIR and of the mouse Ly-49 inhibitory receptor (otherwise structurally unrelated to KIR) represents an interesting case of evolutionary convergence. Furthermore, the motif led to the identification of other receptors with inhibitory potential, including a type I Ig-like receptor shared by mouse mast cells and NK cells.