Fc receptors on phagocytic cells in the blood mediate binding and clearance of immune complexes, phagocytosis of antibody-opsonized microorganisms, and potently trigger effector functions, including superoxide anion production and antibody-dependent cellular cytotoxicity. The Fc receptor type III (Fc gamma R III, CD 16), present in 135,000 sites per cell 1 on neutrophils and accounting for most of FcR in blood, unexpectedly has a phosphatidylinositol glycan (PIG) membrane anchor. Deficiency of Fc gamma R III is observed in paroxysmal nocturnal haemoglobinuria (PNH), an acquired abnormality of haematopoietic cells affecting PIG tail biosynthesis or attachment, and is probably responsible for circulating immune complexes and susceptibility to bacterial infections associated with this disease. Although a growing number of eukaryotic cell-surface proteins with PIG-tails are being described, none has thus far been implicated in receptor-mediated endocytosis or in triggering of cell-mediated killing. Our findings on the Fc gamma R III raise the question of how a PIG-tailed protein important in immune complex clearance in vivo and in antibody-dependent killing mediates ligand internalization and cytotoxicity. Together with our results, previous functional studies on Fc gamma R III and Fc gamma R II suggest that these two receptors may cooperate and that the type of membrane anchor is an important mechanism whereby the functional capacity of surface receptors can be regulated.