The killer cell lectin-like receptor G1, KLRG1, is a cell surface receptor expressed on subsets of natural killer (NK) cells and T cells. KLRG1 was recently found to recognize E-cadherin and thus inhibit immune responses by regulating the effector function and the developmental processes of NK and T cells. E-cadherin is expressed on epithelial cells and exhibits Ca(2+)-dependent homophilic interactions that contribute to cell-cell junctions. However, the mechanism underlying the molecular recognition of KLRG1 by E-cadherin remains unclear. Here, we report structural, binding, and functional analyses of this interaction using multiple methods. Surface plasmon resonance demonstrated that KLRG1 binds the E-cadherin N-terminal domains 1 and 2 with low affinity (K(d) approximately 7-12 microm), typical of cell-cell recognition receptors. NMR binding studies showed that only a limited N-terminal region of E-cadherin, comprising the homodimer interface, exhibited spectrum perturbation upon KLRG1 complex formation. It was confirmed by binding studies using a series of E-cadherin mutants. Furthermore, killing assays using KLRG1(+)NK cells and reporter cell assays demonstrated the functional significance of the N-terminal region of E-cadherin. These results suggest that KLRG1 recognizes the N-terminal homodimeric interface of domain 1 of E-cadherin and binds only the monomeric form of E-cadherin to inhibit the immune response. This raises the possibility that KLRG1 detects monomeric E-cadherin at exposed cell surfaces to control the activation threshold of NK and T cells.