Vaccinia virus secretes a 35 kD protein, vaccinia virus complement control protein (VCP), that inhibits the classical and alternative pathways of complement at several points, indicating that it may be a viral analogue of human complement receptor type 1 (CR1; CD35). Structurally, however, CR1 is composed of 30 short consensus repeats (SCRs), whereas VCP consists entirely of four SCRs. We have begun a structure-function analysis of VCP to define the minimum number of SCRs necessary for function, the functional differences between VCP and CR1, and the potential therapeutic roles for VCP. We addressed these questions by creating and characterizing recombinant soluble and membrane-bound forms of VCP. We have determined that (1) VCP requires all four SCRs to bind C3b, (2) whereas CR1 binds C3b and iC3b, VCP binds C3b but not iC3b, and (3) although normally secreted, if expressed on the membrane of mammalian cells, VCP effectively protects the cells from complement-mediated lysis. Thus, VCP appears to be a compact and unique complement regulatory protein with the ability to inhibit both arms of the complement cascade, but lacking affinity for iC3b. By releasing rather than capturing iC3b-bearing complexes following inactivation of C3b, VCP may 'recycle' its active site locally among infected cells, and thereby enable the virus to evade more efficiently host immune and inflammatory responses. The unique function, compact structure, and capacity of VCP to protect mammalian cells from complement-mediated attack, suggests that it could be used both to better understand the structure-function relationship of complement regulatory proteins, in general, and also to rationally design and develop novel therapeutic agents.