Fc receptor–like (FCRL) 5 is a novel IgG binding protein expressed on B cells, with the capacity to regulate Ag receptor signaling. We assessed FCRL5 expression on circulating B cells from healthy donors and found that FCRL5+ cells are most enriched among atypical CD21−/lo/CD27− tissue-like memory (TLM) B cells, which are abnormally expanded in several autoimmune and infectious diseases. Using multicolor flow cytometry, FCRL5+ TLM cells were found to express more CD11c and several inhibitory receptors than did the FCRL5− TLM subset. The homing receptor profiles of the two TLM subsets shared features consistent with migration away from lymphoid tissues, but they also displayed distinct differences. Analysis of IgH V regions in single cells indicated that although both subsets are diverse, the FCRL5+ subset accumulated significantly more somatic mutations. Furthermore, the FCRL5+ subset had more switched isotype expression and more extensive proliferative history. Microarray analysis and quantitative RT-PCR demonstrated that the two TLM subsets possess distinct gene expression profiles, characterized by markedly different CD11c, SOX5, T-bet, and RTN4R expression, as well as differences in expression of inhibitory receptors. Functional analysis revealed that the FCRL5+ TLM subset responds poorly to multiple stimuli compared with the FCRL5− subset, as reflected by reduced calcium mobilization and blunted cell proliferation. We propose that the FCRL5+ TLM subset, but not the FCRL5− TLM subset, underwent Ag-driven development and is severely dysfunctional. The present study elucidates the heterogeneity of TLM B cells and provides the basis to dissect their roles in the pathogenesis of inflammatory and infectious diseases.