Analyses of the cDNA sequences of glycosyltransferases have shown that these enzymes have inverted membrane topology that consists of a short amino-terminal cytoplasmic tail, a hydrophobic transmembrane anchor domain and the carboxyl-terminal catalytic domain. To examine the role of the transmembrane domain a series of mutants and chimeric cDNA of (beta-1,4- galactosyltransferase (beta-1,4-GT) were constructed by PCR, transiently expressed in COS-7 cells, enzyme activities measured and the protein localized in the cells by subcellular fractionation or indirect immunofluorescence microscopy. Deletion analyses of the amino-terminal region show that the first 21 amino acids of beta-1,4-GT are not essential for the stable production of the protein and are consistently localized in the Golgi apparatus. However, as reported earlier, the deletion of the transmembrane domain abolishes the stable expression of this protein in mammalian cells. In addition, analysis of hybrid constructs showed that residue 1-25 of alpha-1,3-GT can functionally replace the beta-1,4-GT amino-terminal cytoplasmic and transmembrane domain (residues 1-43). This fusion protein also showed Golgi localization. On the other hand, protein fused to the transmembrane domain of (alpha-2,6-sialyltransferase (alpha- 2,6-ST) needed additional COOH-terminal sequences flanking the domain for stability and Golgi localization. Substitution of Arg24, Leu25, Leu26 and His33 of (beta-l,4-GT transmembrane by lIe or substitution of Tyr by Ile at positions 40 and 41 coupled with the insertion of four lIe at position 43 released the mutant proteins from the Golgi and were detected on the cell surface. Our results show that a) the transmembrane domains of (beta- l,4-GT, alpha-1,3-GT, and of alpha-2,6-ST along with its stem region all play a role in Golgi targeting, and participate in a common mechanism that allows the protein to be processed properly and not be degraded in vivo; b) increasing the length of the transmembrane domain overrides the Golgi retention signal and directs the enzyme to the plasma membrane; and c) the length of the hydrophobic region of the transmembrane domain is an important parameter, but is not sufficient by itself for Golgi retention.