The murine T cell hybridoma line, MBI-1.15, secretes a 17-kDa protein which decreases binding activity of the CD23 molecule for its natural ligand, IgE. This protein, denoted ε receptor-modulating protein (εRMP), was previously characterized and shown to be a novel serine protease. The present studies show that, in addition to modulating CD23, εRMP costimulates with Il-4 the de novo synthesis and secretion of IgE and IgG1 by cultured B cells. Since such costimulating activity is reminiscent of a similar synergism with IL-4 previously observed with cell membranes from activated T cells, we examined isolated membranes from the εRMP-producing MBI-1.15 T cell line for comparable activity; indeed, as shown herein. MBI-1.15 cell membranes do exhibit this synergism. Furthermore, we show that a monoclonal antibody (mAb), 2E5B, specific for the 17-kDa soluble form of εRMP, blocks the costimulating activities of both the soluble εRMP and MBI-1.15 T cell membranes for IL-4-induced de novo synthesis of IgE by cultured B cells. This anti-εRMP mAb also detects a 36-kDa membrane-bound protein species which appears to be related to soluble εRMP by immunochemical criteria. The membrane-bound proteins, present on MBI-1.15 T cells, induce germ-line IgE heavy chain transcripts (Iε) in I-29 B cells independently of IL-4, and this inductive event is also specifically blocked by the 2E5B anti-εRMP mAb. These findings suggest that T cell membrane-bound εRMP molecules are crucial proteins involved in contact-dependent B cell class switching in the course of IgE biosynthesis. Finally, both IL-4 and εRMP induce Iε on I-29 B cells, but neither molecule by itself can induce class switching to IgE synthesis by splenic B cells. This clearly suggests that both εRMP and IL-4 have another important molecular effect (which may or may not be identical) on B cells, that is essential for class switching, but only when both molecules are present simultaneously is the complete mechanism of class switching manifested. © 1994 Academic Press. All rights reserved.