The low affinity receptor for IgG, Fc gamma RIIIA, is a multimeric receptor composed of the ligand binding subunit Fc gamma RIIIA alpha (CD16) in association with the signal-transducing subunits zeta or gamma. Previous studies suggested that the cytoplasmic tail of Fc gamma RIIIA alpha was not required for Fc gamma RIIIA alpha-zeta association or signaling by Fc gamma RIIIA. However, in these studies,the truncated Fc gamma RIIIA alpha chains still expressed the four most membrane-proximal amino acids of the cytoplasmic tail (amino acids 230-233). By successive truncations from the C terminus of Fc gamma RIIIA alpha, we have studied the role played by the membrane-proximal amino acids of the cytoplasmic tail of Fc gamma RIIIA alpha in (i) Fc gamma RIIIA expression, (ii) Fc gamma RIIIA alpha-zeta association, and (iii) signal transduction. We provide evidence that this region is not required for Fc gamma RIIIA expression or Fc gamma RIIIA alpha-zeta association. However, signaling by Fc gamma RIIIA is strictly dependent on the membrane-proximal amino acids in the cytoplasmic tail of Fc gamma RIIIA alpha. Thus, total deletion of the cytoplasmic tail of Fc gamma RIIIA alpha results in a severely impaired tyrosine phosphorylation of phospholipase C-gamma 1, zap, and syk and rise in intracellular free Ca2+ following receptor ligation with specific anti-CD16 monoclonal antibody or Ig-anti-Ig complexes, suggesting that Fc gamma RIIIA alpha-zeta association per se is not sufficient to establish the signal function of Fc gamma RIIIA. In conclusion, the present findings demonstrate that the most membrane-proximal amino acids of the Fc gamma RIIIA alpha cytoplasmic tail play a critical role in ligand-induced signal transduction by the Fc gamma RIIIA alpha-zeta complex.