Fc receptor-mediated mononuclear phagocyte system (MPS) clearance is impaired in systemic lupus erythematosus (SLE) and may contribute to the pathogenesis of the immune complex disease. To investigate the basis of MPS dysfunction, we have examined concurrent in vivo and in vitro Fc receptor function in 22 patients with SLE and 23 disease-free adults. Blood monocyte Fc receptor binding was increased rather than decreased as predicted by the saturation hypothesis of MPS blockade. Rosette formation of IgG-sensitized bovine erythrocytes (EA) with monocytes demonstrated increased Fc receptor-ligand binding in SLE (percent rosettes: 40 ± 12 vs 27 ± 8, p < 0.001). Scatchard analysis of the binding of radiolabeled IgG oligomers to SLE monocytes indicated a mean receptor number 30% higher than control, although this did not reach statistical significance. Despite enhanced Fc receptor-ligand (EA) binding, Fc-mediated phagocytosis of EA was decreased in SLE (1.7 ± 0.7 erythrocytes/monocytes/hour vs 2.6 ± 1.0, p < 0.004). This decrease in phagocytosis by blood monocytes from SLE patients was significantly greater than that attributable to the predominance in SLE of individuals with certain HLA B cell alloantigens and intrinsically lower phagocytic rates (p < 0.05 for all groups). This decrease therefore represents a disease-acquired characteristic. Furthermore, the phagocytic rate of the 4 SLE patients with marked prolongation in MPS clearance was significantly lower than that of the 8 patients with near normal clearance values (p < 0.01). Saturation of Fc receptors by immune complexes does not explain impaired immune clearance in SLE. Our results indicate that despite increased binding of the EA ligand, Fc receptor-mediated phagocytosis is markedly impaired in SLE monocytes. This impairment cannot be explained on the basis of HLA-related differences in phagocytosis among lupus patients. The defect in phagocytosis of EA is most profound in those patients with the most significantly impaired MPS clearance. Thus, the dissociation of receptor-ligand binding and receptor-mediated internalization may contribute significantly to the in vivo clearance defect in SLE.