A human E membrane protein that inhibits lysis by the purified human C5b-9 proteins was isolated and characterized. After final purification, the protein migrated as an 18- to 20-kDa band by SDS-PAGE. Elution from gel slices and functional assay after SDS-PAGE (nonreduced) confirmed that all C5b-9 inhibitory activity of the purified protein resided in the 18- to 20-kDa band. Phosphatidylinositol-specific phospholipase C digestion of the purified protein abolished 50% of its C5b-9 inhibitory activity, and removed approximately 15% of the protein from human E. Western blots of normal and paroxysmal nocturnal hemoglobinuria E revealed an absence of the 18- to 20-kDa protein in the paroxysmal nocturnal hemoglobinuria E cells. The identity of this E protein with leukocyte Ag CD59 (P18, HRF20) was confirmed immunochemically and by N-terminal amino acid sequence analysis. A blocking antibody raised against the purified protein reacted with a single 18- to 20-kDa band on Western blots of human erythrocyte membranes. Prior incubation of human E with the F(ab) of this antibody increased subsequent lysis by the purified human C5b-9 proteins. Potentiation of C5b-9-mediated lysis was observed when erythrocytes were preincubated with this blocking antibody before C5b-9 assembly was initiated, or, when this antibody was added after 30 min, 0 degrees C incubation of C5b-8-treated E with C9. Chicken E incubated with purified CD59 were used to further characterize the mechanism of its C-inhibitory activity. Preincorporation of CD59 into these cells inhibited lysis by C5b-9, regardless of whether CD59 was added before or after assembly of the C5b-8 complex. When incorporated into the membrane, CD59 inhibited binding of 125I-C9 to membrane C5b-8 and reduced the extent of formation of SDS-resistant C9 polymer. The inhibitory effect of CD59 on 125I-C9 incorporation was most pronounced at near-saturating input of C9 (to C5b-8). By contrast, CD59 did not inhibit either C5b67 deposition onto the cell surface, or, binding of 125I-C8 to preassembled membrane C5b67. Taken together, these data suggest that CD59 exerts its C-inhibitory activity by limiting incorporation of multiple C9 into the membrane C5b-9 complex.