The E1 glycoprotein from an avian coronavirus is a model protein for studying retention in the Golgi complex. In animal cells expressing the protein from cDNA, the E1 protein is targeted to cis Golgi cisternae (Machamer, C. E., S. A. Mentone, J. K. Rose, and M. G. Farquhar. 1990. Proc. Natl. Acad. Sci. USA. 87:6944-6948). We show that the first of the three membrane-spanning domains of the E1 protein can retain two different plasma membrane proteins in the Golgi region of transfected cells. Both the vesicular stomatitis virus G protein and the alpha-subunit of human chorionic gonadotropin (anchored to the membrane by fusion with the G protein membrane-spanning domain and cytoplasmic tail) were retained in the Golgi region of transfected cells when their single membrane-spanning domains were replaced with the first membrane-spanning domain from E1. Single amino acid substitutions in this sequence released retention of the chimeric G protein, as well as a mutant E1 protein which lacks the second and third membrane-spanning domains. The important feature of the retention sequence appears to be the uncharged polar residues which line one face of a predicted alpha helix. This is the first retention signal to be defined for a resident Golgi protein. The fact that it is present in a membrane-spanning domain suggests a novel mechanism of retention in which the membrane composition of the Golgi complex plays an instrumental role in retaining its resident proteins.