B lymphocytes and macrophages express closely related immunoglobulin G (IgG) Fc receptors (FcγRII) that differ only in the structures of their cytoplasmic domains. Because of cell type-specific alternative messenger RNA splicing, B-cell FcγRII contains an insertion of 47 amino acids that participates in determining receptor function in these cells. Transfection of an FcγRII-negative B-cell line with complementary DNA's encoding the two splice products and various receptor mutants indicated that the insertion was responsible for preventing both FcγRII-mediated endocytosis and FcγRII-mediated antigen presentation. The insertion was not required for FcγRII to modulate surface immunoglobulin-triggered B-cell activation. Instead, regulation of activation involved a region of the cytoplasmic domain common to both the lymphocyte and macrophage receptor isoforms. In contrast, the insertion did contribute to the formation of caps in response to receptor cross-linking, consistent with suggestions that the lymphocyte but not macrophage form of the receptor can associate with the detergent-insoluble cytoskeleton.