Using a three-hybrid strategy, we have identified a novel cell surface molecule which interacts with the Src homology 2 (SH2) domains of SH2 domain-containing protein tyrosine phosphatase 1 (SHP-1), termed "immune receptor expressed on myeloid cells 1" (IREM-1). The full-length cDNA coding for a polypeptide of 290 amino acids presents an extracellular single V-type Ig domain, a transmembrane region and a cytoplasmic tail with five tyrosine residues, two of which are in the context of an immunoreceptor tyrosine-based inhibitory motif. Moreover, cDNA encoding for three other splicing forms of IREM-1, named IREM-1 splice variant (Sv)1, Sv2 and Sv3 were cloned by reverse transcription (RT)-PCR. The gene encoding for IREM-1 contains nine exons, is located on human chromosome 17 (17q25.1) and is homologous to previously identified molecules termed CMRF-35 and IRp60. RT-PCR, northern blot and FACS analysis with specific monoclonal antibodies indicated that IREM-1 is expressed on monocytes, granulocytes, and myeloid leukemia cell lines. Western blot analysis confirmed the recruitment of SHP-1 to IREM-1 and demonstrated that phosphotyrosine residue 205 is the main docking site for this interaction. Finally, cross-linking of IREM-1 results in the inhibition of FcRepsilon-induced activation. Our results indicate that IREM-1 is a novel inhibitory receptor of the Ig superfamily in myeloid cells.