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The proinflammatory cytokine Tumor Necrosis Factor (TNF) exists as a homotrimer, capable of binding three receptor molecules. However, signal competent ligand/receptor complexes form large clusters, likely to be stabilized by additional molecular interactions. Both TNF receptors, TNFR1 and TNFR2, contain four cysteine rich domains (CRD) in their extracellular parts. Previous work showed that the membrane distal CRD1 carries a homophilic interaction domain. Here, we investigated the functional role of CRD1 and its two submodules, A1CRD1 and B2CRD1, in a TNFR1-Fas chimera model system. Removal of CRD1 abolishes TNF binding. In line with these data, molecular dynamics simulations suggest that B2CRD1 of TNFR1 serves as a scaffold to stabilize CRD2 in a conformation necessary for high affinity ligand binding. Deletion of only the N-terminal half of CRD1 (DeltaA1CRD1) of TNFR1 marginally affects ligand binding but abrogates responsiveness towards soluble TNF and reduces effectiveness as a dominant negative inhibitor of wild type TNFR1. A TNFR1-derived molecule containing the CRD1 from TNFR2 also shows reduced responsiveness to soluble TNF. These data strongly suggest that CRD1 is not only crucially involved in multimerization of unligated receptors, but is also directly involved in formation of signal competent ligand/receptor clusters, thereby controlling receptor responsiveness.