Recombinant fusion proteins consisting of the extracellular domain of immunoregulatory proteins and the constant domain of immunoglobulin G (IgG) are a novel class of human therapeutics. IgG isoforms exert different levels of immune effector functions, such as complement lysis and antibody-dependent cell cytotoxicity (ADCC). Several OX40-Ig fusion proteins were generated and compared in their potency to inhibit immune reactions. OX40-IgG fusion proteins act as decoys and inhibit T cell costimulation and extravasation induced by OX40 ligand-expressing antigen-presenting cells (APC) and vascular endothelial cells, respectively. In addition, OX40-IgG1 protein induces ADCC and complement lysis in OX40 ligand-expressing cells. Replacement of the IgG1 by the IgG4 domain (OX40-IgG4) eliminated complement lysis and reduced ADCC by half. Mutation of Leu(235) to Glu in IgG4 eliminated the remaining ADCC activity and generated a protein devoid of immune effector functions (OX40-IgG4mut). In vitro, OX40-IgG1 was more potent in inhibiting proliferation and cytokine release by peripheral blood mononuclear cells than OX40-IgG4mut, as OX40-IgG1 induced cell death in APC. However, both proteins reduced T cell-mediated colitis in mice to the same extent, indicating that in vivo neutralization of OX40L is sufficient. This study also demonstrates that effector functions of antibodies are retained and can be rationally designed in receptor-IgG fusion proteins.