Ligand-induced cross-linking of the type I interferon (IFN) receptor subunits ifnar1 and ifnar2 induces a pleiotrophic cellular response. Several studies have suggested differential signal activation by flexible recruitment of the accessory receptor subunit ifnar1. We have characterized the roles of the four Ig-like sub-domains (SDs) of the extracellular domain of ifnar1 (ifnar1-EC) for ligand recognition and receptor assembling. Various sub-fragments of ifnar1-EC were expressed in insect cells and purified to homogeneity. Solid phase binding assays with the ligands IFN(alpha)2 and IFN(beta) revealed that all three N-terminal SDs were required and sufficient for ligand binding, and that IFN(alpha)2 and IFN(beta) compete for this binding site. Cellular binding assays with different fragments, however, highlighted the key role of the membrane-proximal SD for the formation of an in situ IFN-receptor complex. Even substitution with the corresponding SD from homologous cytokine receptors did not restore high-affinity ligand binding. Receptor assembling analysis on supported lipid bilayers in vitro revealed that the membrane-proximal SD controls appropriate orientation of the receptor on the membrane, which is required for efficient association of ifnar1 into the ternary complex.