The complement fragments C3b and C4b are the main ligands for the membrane receptor CR1. We showed elsewhere that CR1 functions as an essential cofactor for the factor I-mediated enzymatic breakdown of membrane-bound C3b (*C3b) into C3c and * C3dg . One of the main findings of the present paper is that CR1 also promotes the degradation of bound C4b (*C4b) into C4c and *C4d. On a weight basis, the cofactor activity of CR1 in the cleavage of *C4b present on the cell intermediate EAC14 is 10(3)-fold greater than that of the serum cofactor C4-binding protein ( C4bp ). An additional finding is that the effect of CR1 on either *C3b or *C4b is modulated by the presence of the other ligand in its vicinity; that is, *C4b degradation by CR1 plus I is enhanced by neighboring *C3b and vice versa. For example, upon uptake of optimal amounts of *C3b onto EAC142 and the assembly of the C3-convertase EAC1423 , the activity of CR1 in generating C4c is enhanced 5-10 times further. Conversely, when the number of *C3b molecules on EAC1423 is relatively small (or when EAC1423 has been converted by I plus H into EAC1423i ), the presence of neighboring *C4b enhances the conversion of *C3b (or *iC3b) into C3c plus * C3dg . The enhancing effect of *C3b on the cleavage of *C4b by I is observed only if the cofactor of this reaction is CR1. Indeed, the activity of I or I plus C4bp on *C4b is significantly inhibited when *C3b is fixed and the main product of the reaction is * iC4b . Taken together, these findings suggest that degradation of *C4b will be more effective when enough C3b molecules are fixed nearby, thus facilitating the interaction of *C4b*3b clusters with CR1-bearing cells, and that under physiological conditions, *C4b activity can be efficiently controlled by CR1.