We have shown previously that certain proteases can modulate the affinity of human Fc gamma RII for IgG. To study whether proteolytic events not only increase FcR affinity, but are essential for Fc gamma R functioning, we evaluated the effect of different protease inhibitors on binding mediated by two classes of human monocyte IgG FcR. These R, Fc gamma RI and Fc gamma RII, can be analyzed selectively in rosetting assays by employing E sensitized by either human IgG or mouse IgG1. Rosetting by both classes of R was inhibited profoundly by incubation of monocytes with different types of serine protease inhibitors such as diisopropylfluorophosphate, PMSF, or N alpha-tosyl-L-lysyl-chloromethylketone. The type II Fc gamma R was much more sensitive to inhibition than Fc gamma RI. We, therefore, studied these effects in more detail by using cell line K562, which expresses only Fc gamma RII. PMSF, diisopropylfluorophosphate, and N alpha-tosyl-L-lysyl-chloromethylketone were, again, inhibiting Fc gamma RII-mediated binding dose-dependently, whereas several inhibitors of metal, aspartic, or thiol proteases proved ineffective. Furthermore, Fc gamma RII-mediated rosetting on both cell types was profoundly inhibited by the addition of different small synthetic substrates of serine esterases. In an attempt to discriminate whether the proteolytic event is an intra- or extracellular process, macromolecular antiproteases such as soybean or ovomucoid trypsin inhibitor or alpha 1-antiprotease were tested. Fc gamma RII-mediated binding by K562 cells was not susceptible to macromolecular antiproteases, in contrast to monocytes. In the presence of drugs which interfere both with receptor recycling and intracellular traffic between endosomal compartments (e.g., primaquine or monensin), the effects of inhibitors were largely abrogated. This showed that endocytosis of inhibitors might be essential, indicating the proteolytic event to be intracellular. Our findings suggest that human monocyte Fc gamma RII-mediated functioning is dependent upon the action of one or more serine proteases.