Human leukocyte-associated immunoglobulin-like receptor (LAIR)-1 is expressed on many cells of the immune system and is predicted to mediate inhibitory functions based on the presence of immunoreceptor tyrosine-based inhibitory motifs (ITIMs) in its cytoplasmic domain. Although the role of LAIR-1 in the regulation of immune responses in vivo is unknown, LAIR-1 cross-linking by monoclonal antibody inhibits various immune cell functions in vitro. Here, we identify the coloncarcinoma-associated epithelial cellular adhesion molecule (Ep-CAM) as a ligand for LAIR-1 and LAIR-2, a related soluble LAIR-1 family member. Ep-CAM interacts with the LAIR molecules through its first epidermal growth factor domain; Ep-CAM - specific antibodies can abrogate the binding. Intraepithelial T lymphocytes express LAIR-1 and thus may interact with Ep-CAM present on human intestinal epithelium. We propose that LAIR-1-Ep-CAM interaction may contribute to mucosal tolerance and that LAIR-2 possibly modulates this function.