CD7 is a 40-kDa protein found primarily on T, NK, and pre-B cells; the function of the CD7 protein in the immune system is largely unknown. The K12 (SECTM1) protein was originally identified by its location just upstream of the CD7 locus. The K12 gene encodes a transmembrane protein of unknown function. In order to clone a K12-binding protein, we generated a soluble version of the human K12 protein by fusing its extracellular domain to the Fc portion of human IgG(1). Flow cytometry experiments showed that the K12-Fc fusion protein bound at high levels to both human T and NK cells. Precipitation experiments using K12-Fc on (35)S-radiolabeled NK cells lysates indicated that the K12 cognate was an approximately 40-kDa protein. A human peripheral blood T cell cDNA expression library was screened with the K12-Fc protein, and two independent, positive cDNA clones were identified and sequenced. Both cDNAs encoded the same protein, which was CD7. Thus, K12 and CD7 are cognate proteins that are located next to each other on human chromosome 17q25. Additionally, we have cloned the gene encoding the mouse homologue of K12, shown that it maps near the mouse CD7 gene on chromosome 11, and established that the mouse K12 protein binds to mouse, but not human, CD7. Mouse K12-Fc inhibited in a dose-dependent manner concanavalin A-induced proliferation, but not anti-TcRalpha/beta induced proliferation, of mouse lymph node T cells. Human K12-Fc stimulated the up-regulation of CD25, CD54, and CD69 on human NK cells in vitro.