Genetic polymorphisms found in the killer Ig-like receptor (KIR), two domains, long cytoplasmic tail 2/3 (KIR2DL2/3) locus are responsible for the differential binding of KIR2DL2/3 allelic products with their HLA-C ligands and have been associated with the resolution of hepatitis C infection. In our study, a KIR CD3zeta fusion-binding assay did not detect any interaction between the KIR2DL2*004 extracellular domain and several putative KIR2DL2/3 ligands. To determine the amino acid polymorphism(s) responsible for the KIR2DL2*004 phenotype, we mutated the polymorphic residues of full-length KIR and expressed them in human Jurkat cells. Flow cytometry analysis failed to detect the surface expression of receptors containing a threonine at position 41 (T41), a polymorphism specific to KIR2DL2*004. Confocal microscopy showed that receptors containing T41 were retained inside the cell and had a perinuclear localization, possibly indicating that their extracellular domain was misfolded. Most KIR2DL2/3 alleles possess an arginine at position 41 (R41), and we predicted through molecular modeling and demonstrated by mutagenesis that R41 most likely interacts with the nearby residues Y77 and D47. Interaction between these residues would maintain C strand contact with the C' and F strands of the D1 domain beta-sheet. Furthermore, R41 and Y77 are conserved in the C and F strand amino acid alignments of Ig-like superfamily members, and may therefore be necessary for the structural integrity of other immune response proteins. Our data indicate that the extracellular T41 polymorphism encoded by the KIR2DL2*004 allele most likely results in misfolding of the D1 domain and complete intracellular retention of the receptor.