Human CD21 has been described as a receptor for the C3d,g and iC3b proteins of complement, for the Epstein-Barr virus, and also for IFN-alpha. We reported recently that CD23, a low affinity receptor for IgE (Fc epsilon R2), is a new functional ligand for CD21. To determine the site of interaction of CD23 on CD21, we analyzed the ability of purified recombinant CD23 incorporated into fluorescent liposomes to bind CD21 mutants bearing various deletions of extracytoplasmic short consensus repeats (SCRs). We found that the site of interaction of CD23 on CD21 is on SCRs 5 to 8, with contribution of SCRs 1 and 2. Tunicamycin treatment of CD21-transfected K562 cells strongly inhibited the binding of CD23-liposomes, suggesting that an N-linked sugar, present on SCRs 5 to 8, is involved in the CD23/CD21 interaction. By mutating together or individually, the three asparagines present on SCRs 5 to 8, asparagines (Asn) 370 and 295, but not Asn 492, were shown to be involved critically in the binding of CD23. Furthermore, we mapped the binding sites of a panel of anti-CD21 mAbs and found that at least six epitopes can be detected on CD21. The mAbs that inhibit the most CD23 binding to CD21 map in SCRs 5 to 8. This study indicates that SCRs 5 to 8 represent a novel functional domain on the CD21 molecule, and is the first demonstration of an activity of an extracytoplasmic region of the CD21 outside of SCRs 1 to 4.