Abstract Ly49B is a potentially important immunoregulator expressed on mouse myeloid cells, and it is thus an unusual member of the wider Ly49 family whose members are ordinarily found on NK cells. Ly49B displays substantial sequence divergence from other Ly49s and in particular shares virtually no amino acid sequence identity with the residues that have been reported to bind to MHC class I (cI) ligands in other Ly49s. Despite this, we show in this study that the BALB/c, but not the C57, isoform of Ly49B displays promiscuous cI binding. Binding was not significantly affected by inactivation of any of the four predicted N-linked glycosylation sites of Ly49B, nor was it affected by removal of the unique 20-aa C-terminal extension found in Ly49B. However, transfer of these C-terminal 20 aa to Ly49A inhibited cI binding, as did the addition of a hemagglutinin tag to the C terminus of Ly49B, demonstrating unexpectedly that the C-terminal region of Ly49s can play a significant role in ligand binding. Systematic exchange of BALB/c and C57 residues revealed that Trp166, Asn167, and Cys251 are of major importance for cI binding in Ly49B. These residues are highly conserved in the Ly49 family. Remarkably, however, Ly49BBALB variants that have C57 residues at positions 166 or 167, and are unable to bind cI multimers, regain substantial cI binding when amino acid changes are made at distal positions, providing an explanation of how highly divergent Ly49s that retain the ability to bind cI molecules might have evolved.