The activity of NK cells is regulated by activating receptors that recognize mainly stress-induced ligands and by inhibitory receptors that recognize mostly MHC class I proteins on target cells. Comparing the cytoplasmic tail sequences of various MHC class I proteins revealed the presence of unique cysteine residues in some of the MHC class I molecules which are absent in others. To study the role of these unique cysteines, we performed site specific mutagenesis, generating MHC class I molecules lacking these cysteines, and demonstrated that their expression on the cell surface was impaired. Surprisingly, we demonstrated that these cysteines are crucial for the surface binding of the leukocyte Ig-like receptor 1 inhibitory receptor to the MHC class I proteins, but not for the binding of the KIR2DL1 inhibitory receptor. In addition, we demonstrated that the cysteine residues in the cytoplasmic tail of MHC class I proteins are crucial for their egress from the endoplasmic reticulum and for their palmitoylation, thus probably affecting their expression on the cell surface. Finally, we show that the cysteine residues are important for proper extracellular conformation. Thus, although the interaction between leukocyte Ig-like receptor 1 and MHC class I proteins is formed between two extracellular surfaces, the intracellular components of MHC class I proteins play a crucial role in this recognition.