Lymphocytes in direct contact with embryonic extravillous trophoblasts constitute more than 40]% of decidual cells and appear to play major roles in implantation and early gestation. A unique subset of NK cells, making up 70-80% of decidual lymphocytes, express high levels of CD56 but lack CD16. We have recently demonstrated a novel class I MHC-independent inhibitory mechanism of NK cell cytotoxicity that is mediated by CEACAM1 homotypic interactions. This mechanism is used by some melanoma cells to avoid attack, mainly by CD16-NK cells. We now demonstrate that CEACAM1 is expressed on primary extravillous trophoblasts and is upregulated on the vast majority of IL-2-activated decidual lymphocytes, including NK, T, and NKT cells. Importantly, we present evidence that CEACAM1 interactions inhibit the lysis, proliferation, and cytokine secretion of activated decidual NK, T, and NKT cells, respectively. In vivo analysis of decidual lymphocytes isolated from cytomegalovirus-infected (CMV-infected) pregnant women revealed a dramatic increase in the expression of CEACAM1. Finally, we suggest that a novel ligand for this adhesion molecule is present on the surface of CMV-infected fibroblasts. These combined results demonstrate a major role for the CEACAM1 protein in controlling local decidual immune responses.