The nonclassical class I MHC molecule HLA-G is selectively expressed on extravillous cytotrophoblast cells at the maternal-fetal interface during pregnancy. HLA-G can inhibit the killing mediated by NK cells via interaction with the inhibitory NK cell receptor, leukocyte Ig-like receptor-1 (LIR-1). Comparison of the sequence of the HLA-G molecule to other class I MHC proteins revealed two unique cysteine residues located in positions 42 and 147. Mutating these cysteine residues resulted in a dramatic decrease in LIR-1 Ig binding. Accordingly, the mutated HLA-G transfectants were less effective in the inhibition of NK killing and RBL/LIR-1 induced serotonin release. Immunoprecipitation experiments demonstrated the involvement of the cysteine residues in the formation of HLA-G protein oligomers on the cell surface. The cysteine residue located at position 42 is shown to be critical for the expression of such complexes. These oligomers, unique among the class I MHC proteins, probably bind to LIR-1 with increased avidity, resulting in an enhanced inhibitory function of LIR-1 and an impaired killing function of NK cells.