The high-affinity receptor for IgE (Fc epsilon RI) on mast cells and basophils is a tetrameric complex, alpha beta gamma 2. Here we summarize the latest developments on the structure and function of this receptor. By genetic transfer, we have engineered a cell line secreting substantial amounts of a peptide containing exclusively the extracellular domain of the alpha-subunit. This domain by itself is sufficient to mediate high-affinity binding of IgE. Glycosylation and the presence of the other subunits are not necessary for the binding function. The gamma-subunit of Fc epsilon RI is part of other receptors such as Fc gamma RIII and the T cell receptor, and therefore is likely to play an important although still undefined functional role. A detailed knowledge of how the receptor interacts with IgE and induces cellular degranulation may lead to the design of new therapeutic approaches to allergic diseases. The potential strategies are discussed.