Rat liver 5'-nucleotidase was purified from a crude microsomal fraction, and its molecular mass was estimated to be 73 kDa by sodium dodecyl sulfate-polyacrylamide gel electrophoresis. The purified protein was subjected to cleavage with CNBr or lysyl endopeptidase, and the resulting 21 peptides as well as the NH2 terminus of the native protein were sequenced by Edman degradation. For further information on the molecular structure, we constructed a lambda gt11 liver cDNA library and isolated two cDNA clones for 5'-nucleotidase, lambda cNTP6 and lambda cNT34. The 3.2-kilobase cDNA insert of lambda cNTP6 contains an open reading frame that encodes a 576-residue polypeptide with a calculated size of 63,965 Da, which is in reasonable agreement with that of 5'-nucleotidase (62 kDa) immunoprecipitated from cell-free translation products. The NH2-terminal 28 residues comprise a signal peptide, which is followed by the NH2-terminal sequence of the purified protein. The predicted structure contains all the other peptide sequences determined by Edman degradation. Five potential N-linked glycosylation sites are found in the molecule, accounting for the difference in mass between the precursor and mature forms. Another characteristic feature is that the primary structure contains a highly hydrophobic amino acid sequence at the COOH terminus, a possible signal for the post-translational modification by glycophospholipid. In fact, labeling experiments of rat hepatocytes demonstrated that 3H-labeled compounds such as ethanolamine, myo-inositol, and palmitic acid, components of the glycolipid anchor, were incorporated into 5'-nucleotidase. Phosphatidylinositol-specific phospholipase C released 5'-nucleotidase from the cell surface, and the released protein no longer contained the radioactivity of [3H]palmitic acid incorporated.