Glycosyl-phosphatidylinositol- (GPI) anchored proteins contain a large extracellular protein domain that is linked to the membrane via a glycosylated form of phosphatidylinositol. We recently reported the polarized apical distribution of all endogenous GPI-anchored proteins in the MDCK cell line (Lisanti, M. P., M. Sargiacomo, L. Graeve, A. R. Saltiel, and E. Rodriguez-Boulan. 1988. Proc. Natl. Acad. Sci. USA. 85:9557-9561). To study the role of this mechanism of membrane anchoring in targeting to the apical cell surface, we use here decay-accelerating factor (DAF) as a model GPI-anchored protein. Endogenous DAF was localized on the apical surface of two human intestinal cell lines (Caco-2 and SK-CO15). Recombinant DAF, expressed in MDCK cells, also assumed a polarized apical distribution. Transfer of the 37-amino acid DAF signal for GPI attachment to the ectodomain of herpes simplex glycoprotein D (a basolateral antigen) and to human growth hormone (a regulated secretory protein) by recombinant DNA methods resulted in delivery of the fusion proteins to the apical surface of transfected MDCK cells. These results are consistent with the notion that the GPI anchoring mechanism may convey apical targeting information.