Human phagocytic cells express receptors for the constant (Fc) region of immunoglobulin G. Neutrophils carry Fc receptor II (FcRII; CDw32) and FcRIII (CD16) which both bind IgG-containing immune complexes, leading to phagocytosis of the complex and activation of the neutrophil. We find that patients with paroxysmal nocturnal haemoglobinuria (PNH) have only about 10% of the normal levels of FcRIII on their neutrophils, whereas the expression of FcRII is unaffected. We show that FcRIII is a phosphatidyl inositol (PI)-anchored protein in neutrophils. Analysis of FcRIII expression in cells of PNH patients, known to be deficient in PI-linked proteins, suggests FcRIII is not PI-linked in monocytes. We find that the synthesis of FcRIII in neutrophils from PNH patients appears normal, indicating that the defect lies in the PI linkage. This lipid linkage of the receptor on neutrophils suggests that its release may be important for its function, and indeed FcRIII release was observed on stimulation of neutrophils by an inflammatory bacterial peptide (f-Met-Leu-Phe), suggesting a role for FcRIII shedding in inflammatory reactions. Activation of the PNH neutrophils with IgG-coated latex beads appeared normal (although binding of dimer IgG complexes was reduced), indicating that FcRII, rather than FcRIII, is involved in neutrophil stimulation.