May be involved in ER stress pathways with effects on lipid homeostasis and insulin secretion. With ILDR1 and LSR, involved in the maintain of the epithelial barrier function through the recruitment of MARVELD2/tricellulin to tricellular tight junctions (By similarity). Also functions as a B7-like protein family member expressed on immune cells and inflamed tissue and with T-cell inhibitory activity (PubMed:29431694). In the inner ear, may regulate alternative pre-mRNA splicing via binding to TRA2A, TRA2B and SRSF1 (By similarity). Interacts with MARVELD2 and OCLN. Interacts with P4HB AND HSPA5; the interaction with HSPA5 stabilizes ILDR2 expression. Interacts (via C-terminus) with TRA2A, TRA2B and SRSF1. Expressed in testis, brain, pituitary, colon, heart, nerves, prostate, esophagus, lung liver and small intestine (PubMed:29431694). Highly expressed in macrophages, also expressed in monocytes and at low levels in NK and NKT cells (at protein level) (PubMed:29431694). Expression is up-regulated following differentiation of monocytes to macrophages. Belongs to the immunoglobulin superfamily. LISCH7 family.