Human histocompatibility leukocyte antigen (HLA)-E is a nonclassical HLA class I molecule, the gene for which is transcribed in most tissues. It has recently been reported that this molecule binds peptides derived from the signal sequence of HLA class I proteins; however, no function for HLA-E has yet been described. We show that natural killer (NK) cells can recognize target cells expressing HLA-E molecules on the cell surface and this interaction results in inhibition of the lytic process. Furthermore, HLA-E recognition is mediated primarily through the CD94/NKG2-A heterodimer, as CD94-specific, but not killer cell inhibitory receptor (KIR)-specific mAbs block HLA-E-mediated protection of target cells. Cell surface HLA-E could be increased by incubation with synthetic peptides corresponding to residues 3–11 from the signal sequences of a number of HLA class I molecules; however, only peptides which contained a Met at position 2 were capable of conferring resistance to NK-mediated lysis, whereas those having Thr at position 2 had no effect. Interestingly, HLA class I molecules previously correlated with CD94/NKG2 recognition all have Met at residue 4 of the signal sequence (position 2 of the HLA-E binding peptide), whereas those which have been reported not to interact with CD94/NKG2 have Thr at this position. Thus, these data show a function for HLA-E and suggest an alternative explanation for the apparent broad reactivity of CD94/NKG2 with HLA class I molecules; that CD94/NKG2 interacts with HLA-E complexed with signal sequence peptides derived from "protective" HLA class I alleles rather than directly interacting with classical HLA class I proteins.