CD23, the low affinity receptor for IgE, exists in membrane and soluble forms. Soluble CD23 fragments are released from membrane CD23 by the endogenous metalloprotease, ADAM10. When purified tonsil B cells are incubated with IL-4 and anti-CD40 to induce class switching to IgE in vitro, membrane CD23 is up-regulated and soluble CD23 accumulates in the medium prior to IgE synthesis. We have uncoupled the effects of membrane CD23 cleavage and accumulation of soluble CD23 on IgE synthesis in this system. We show that siRNA inhibition of CD23 synthesis or inhibition of membrane CD23 cleavage by an ADAM10 inhibitor, GI254023X, suppress IL-4 and anti-CD40-stimulated IgE synthesis. Addition of a recombinant trimeric soluble CD23, ‘triCD23’, enhances IgE synthesis in this system. This occurs even when endogenous membrane CD23 is protected from cleavage by GI254023X, indicating that IgE synthesis is positively controlled by soluble CD23. We show that triCD23 binds to cells co-expressing membrane IgE and membrane CD21 and caps these proteins on the B cell membrane. Up-regulation of IgE by soluble CD23 occurs after class switch recombination and its effects are isotype-specific. These results suggest that membrane IgE and membrane CD21 co-operate in the soluble CD23-mediated positive regulation of IgE synthesis on cells committed to IgE synthesis. Feedback regulation may occur when the concentration of secreted IgE becomes great enough to allow binding to membrane CD23, thus preventing further release of soluble CD23. We interpret these results with the aid of a model for the up-regulation of IgE by soluble CD23.