Membrane bound and soluble forms of a high-affinity folate binding protein have been found in kidney, placenta, serum, milk, and in several cell lines. The two forms have similar binding characteristics for folates, are immunologically cross-reactive and based upon limited amino acid sequence data, are nearly identical. Based upon pulse-chase experiments, a precursor-product relationship has been suggested. The membrane form has been shown to mediate the transport of folate in cells grown in physiological concentrations of folate. A function for the soluble form has not yet been identified. We constructed a cDNA library from a human carcinoma cell line, Caco-2, which expresses the membrane form abundantly. The library was screened and a near full-length cDNA for the folate binder was isolated. Transfection of COS cells with the cDNA inserted in an expression vector resulted in marked overexpression of a membrane-associated folate binder as assessed by direct binding of radiolabeled folate and by indirect immunofluorescence. The deduced amino acid sequence is not consistent with a typical membrane spanning domain but rather with a signal for anchoring via a glycosyl-phosphatidylinositol linkage. Release of the binder with a phosphatidylinositol-specific phospholipase C strongly supports this hypothesis.