The leukocyte-associated Ig-like receptor-1 (LAIR-1) is capable of inhibiting immune cell function through interaction with collagens. LAIR is expressed on the majority of peripheral blood mononuclear cells. The abundant expression of both receptor and ligand calls for regulatory mechanisms to relieve the continuous interaction between collagens and LAIR-1. This regulation may occur at the expression level of the receptor. Here, we report that LAIR-1 is indeed differentially expressed during human T cell differentiation. Naive CD4(+) and CD8(+) T cells as well as CD8(+) T cells of the effector phenotype express higher levels of LAIR-1 compared to memory T cells. In vitro stimulation revealed a decrease in LAIR-1 expression upon activation, and the lower LAIR-1 expression on CD127(-) T cells suggests that activation-induced down-modulation of LAIR-1 may also occur in vivo. Furthermore, crosslinking of LAIR-1 on primary T cells results in an inhibition of T cell function. Our data suggest that regulated expression of LAIR-1 and the subsequent change in the threshold for activation may be a mechanism to modulate inhibition of the immune system.