B lymphocytes and Raji cells express the complement receptor type 2 (CR2) of 145 kDa which recognises the C3d fragment of C3. When intact cells are treated with trypsin, CR2 is degraded. There is a parallel loss in C3d-mediated rosetting and in proteins which bind to C3d-Sepharose. Initially 97 and then 83 kDa fragments of CR2 are produced which retain C3d binding activity. These fragments are associated with the cell surface and mediate rosetting. Purified 125I-labelled CR2, solubilised in detergent, produces fragments of apparently identical size on treatment with trypsin. The 83 kDa fragment produced by trypsin treatment closely resembles the major C3d binding protein spontaneously released into Raji cell culture medium.