CRIg is a recently discovered complement C3 receptor expressed on a subpopulation of tissue-resident macrophages. The extracellular IgV domain of CRIg (CRIg-ECD) holds considerable promise as a potential therapeutic because it selectively inhibits the alternative pathway of complement by binding to C3b and inhibiting proteolytic activation of C3 and C5. However, CRIg binds weakly to the convertase subunit C3b (K(D) = 1.1 microm), and thus a relatively high concentration of protein is required to reach nearly complete complement inhibition. To improve therapeutic efficacy while minimizing risk of immunogenicity, we devised a phage display strategy to evolve a high affinity CRIg-ECD variant with a minimal number of mutations. Using the crystal structure of CRIg in complex with C3b as a guide for library design, we isolated a CRIg-ECD double mutant (Q64R/M86Y, CRIg-v27) that showed increased binding affinity and improved complement inhibitory activity relative to CRIg-ECD. In a mouse model of arthritis, treatment with a Fc fusion of CRIg-v27 resulted in a significant reduction in clinical scores compared with treatment with an Fc fusion of CRIg-ECD. This study clearly illustrates how phage display technology and structural information can be combined to generate proteins with nearly natural sequences that act as potent complement inhibitors with greatly improved therapeutic efficacy.