Compositions and methods of use thereof for modulating LAIR-1 are provided. For example, immunomodulatory agents are provided that reduce LAIR-1 expression, ligand binding, crosslinking, negative signaling, or a combination thereof. Such agents can be used to increase an immune response in a subject in need thereof. Exemplary agents include (i) a soluble LAIR-2 polypeptide or fusion protein, (ii) a soluble LAIR-1 polypeptide or fusion protein, (iii) a function blocking anti-LAIR-1 antibody, (iv) an antibody that depletes LAIR-1 positive cells, and (y) combinations thereof. Immunomodulatory agents are also provided that increase LAIR-1 expression, ligand binding, crosslinking, negative signaling, or a combination thereof. Such agents can be used to reduce an immune response in a subject in need thereof. Exemplary agents include: (i) a function activating anti-LAIR-1 antibody, (ii) a function blocking anti-LAIR-2 antibody, and (iii) a combination thereof.