This study examines the function of SP-40,40, a newly identified component of the SC5b-9 complement complex, in the regulation of the terminal complement pathway. Purified SP-40,40 was shown to inhibit, in a dose-dependent manner, C5b-6-initiated haemolysis. Apparently additive inhibition was also demonstrated in conjunction with complement S-protein, although SP-40,40 appears to be the more potent inhibitor on an equimolar basis. The data suggest that SP-40,40, like S-protein, probably combines with the nascent C5b-7 complex, forming a cytolytically inactive SC5b-7 - SP-40,40 complex. Preparations of S-protein, purified by an established technique, were shown to be contaminated with SP-40,40. Preparations of affinity-purified SP-40,40 were also shown to contain S-protein, suggesting that these proteins may be partially complexed in plasma.