CD16 is a low affinity Fc gamma R III expressed on granulocytes, macrophages and large granular lymphocytes, the mediators of antibody-dependent cellular cytotoxicity and NK. The occupancy of CD16 by aggregated IgG on large granular lymphocytes induces expression of activation markers, release of inflammatory mediators and triggering of effector functions such as antibody-dependent cellular cytotoxicity. Recently we and others described that CD16 is anchored to the membrane of granulocytes via a phosphatidylinositol glycan moiety. Here we show that the CD16 molecule expressed on NK cells, cultured monocytes, and lung macrophages is not phosphatidylinositol glycan moiety anchored. It is not released with phosphatidylinositol-specific phospholipase C, and after removal of N-linked carbohydrate is 5 to 7 kDa larger than the granulocyte CD16 molecule, strongly suggesting the presence of transmembrane and cytoplasmic protein domains. Redirected killing of hybridoma targets expressing anti-CD16 surface Ig shows that NK cell CD16 is unable to do so. These findings demonstrate that NK cell and granulocyte CD16 have different membrane anchors and indicate that the type of membrane anchor is an important biologic mechanism for regulating the functional capacity of surface receptors.