The low affinity IgE receptor, CD23, is implicated in IgE regulation and the pathogenesis of allergic disease. CD23 is a type II integral membrane protein, comprising a lectin "head," N-terminal "stalk," and C-terminal "tail" in the extracellular sequence. Endogenous proteases cleave CD23 in the stalk and the tail to release soluble fragments that either stimulate or inhibit IgE synthesis in human B cells. The molecular basis of these paradoxical activities is not understood. We have characterized three fragments of CD23, monomeric derCD23, monomeric exCD23, and oligomeric lzCD23. We show that the monomers inhibit and the oligomer stimulates IgE synthesis in human B cells after heavy chain switching to IgE. CD23 fragments could be targets for therapeutic intervention in allergic disease.