Background: The SLAM receptor CD229/LY9 is strongly expressed on multiple myeloma (MM) cells and is required for their growth, rendering it a potential target for the treatment of MM. Methods: We used antibody phage display to develop the first fully human antibody targeting CD229, clone 2D3. Using various screening assays, as well as biochemical characterization and functional assays, we evaluated this antibody and T cells expressing a chimeric antigen receptor (CAR) based on this antibody. Low-affinity antibodies were generated using a single site saturation variant library and characterized using high-throughput surface plasmon resonance. Results: 2D3 binds strongly to the malignant plasma cells from 20/20 analyzed patients with newly diagnosed and relapsed-refractory MM as well as normal memory B and T cells but not activated T cells due to the rapid downregulation of CD229 during T cell activation allowing efficient CD229 CAR T cell production. CD229 CAR T cells specifically kill CD229-expressing cells and show potent killing of MM cell lines and primary plasma cell leukemia cells. In contrast to BCMA CAR T cells, CD229 CAR T cells also eliminate memory B cells, a potential reservoir of clonotypic MM precursors. We further observed significantly reduced colony formation by CD34neg bone marrow cells from patients with MM after treatment with CD229 CAR T cells compared to BCMA CAR T cells, indicating more efficient targeting of tumor propagating cells. In vivo treatment with a single dose of CD229 CAR T cells resulted in tumor eradication or delayed tumor growth and significantly prolonged survival. While we observed that CD229 CAR T cells target resting CD229high T cells, they spared CD229neg/low T cells. CD229neg/low T cells show the same phenotype as CD229high T cells and conventional effector functions in response to common pathogens. To further reduce the targeting of normal T cells, we generated low-affinity CD229 antibodies and show that CAR T cells based on the these antibodies have increased selectivity for MM cells over normal T cells. Conclusions: CD229 CAR T cells can be manufactured efficiently and are highly active against MM, including tumor propagating cells. CD229 CAR T cells show limited fratricide during CAR T cell production, spare a functional CD229neg/low T cell population, and reducing antibody affinity further enhances their selectivity for MM. CAR T cells targeting CD229 are a promising new approach for the treatment of MM.