The transmembrane isoform of Fc gamma RIII, Fc gamma RIIIA, is found on NK cells, cultured monocytes, and tissue macrophages in association with a dimer of an accessory subunit, either gamma or zeta. Functions of individual Fc receptors have been difficult to analyze due to coexpression of the receptors on hematopoietic cells and permanent cell lines expressing Fc receptors. cDNAs for the alpha and gamma subunits of Fc gamma RIIIA were cotransfected into COS-1 cells, which lack endogenous Fc receptors, to evaluate receptor-mediated phagocytosis and changes in [Ca2+]i. Transfectants both bound and phagocytosed IgG-sensitized erythrocytes and, following activation of Fc gamma RIIIA, increased [Ca2+]i. The gamma subunit was essential both for the surface expression of the receptor and for transduction of the phagocytic signal. Truncation of the gamma subunit cytoplasmic domain (amino acids 65-80) eliminated phagocytic function. Phorbol ester inhibited phagocytosis in a concentration-dependent manner, but did not affect IgG-sensitized erythrocytes binding, suggesting that a protein kinase C-dependent pathway inhibits phagocytosis. The data indicate that a tyrosine containing cytoplasmic domain within the gamma subunit is required for phagocytosis by Fc gamma RIIIA.