An emerging family of cell surface inhibitory receptors is characterized by the presence of intracytoplasmic immunoreceptor tyrosine-based inhibition motifs (ITIM). These ITIM-bearing inhibitory receptors, which are typically paired with activating isoforms, associate with Src homology domain 2-containing phosphatases following ITIM tyrosine phosphorylation. Two categories of phosphatases are recruited by the ITIM-bearing receptors: the protein-tyrosine phosphatases, SHP-1 and SHP-2, and the polyphosphate inositol 5-phosphatase, SHIP. The dynamic equilibrium of B cell activation is partially controlled by two well known ITIM-bearing receptors, CD22 and FcγRIIB, a low affinity receptor for IgG. We describe here that a murine ITIM-bearing molecule, PIR-B, can also negatively regulate B cell activation. Tyrosine-phosphorylated ITIMs allow PIR-B to associate with SHP-1 but not with SHIP. Engagement of PIR-B thereby initiates a SHP-1-dependent inhibitory pathway that may play an important role in regulating B lymphocyte activation.