Interaction of epidermal growth factor (EGF) with its specific receptor (EGFR) was explored in the intact rat small intestine and in highly purified isolated enterocyte membrane preparations. Despite the fact that the EGF ligand is known to be present at physiological concentrations within the intestinal cavity, no significant binding of the ligand to the brush border surface was observed. Instead, binding of EGF to the EGFR was confined to other membrane populations, and correlation of ligand interaction with the laterobasal membranes (LBM) was nearly perfect (p less than 0.001) across a special equilibrium gradient enriched in brush border and LBM but devoid of intracellular membranes. Specific binding to another minor population of intracellular membranes that migrated to a position less dense than typical endoplasmic reticulum-Golgi vesicles on equilibrium gradients was also observed. Immunocytochemical exposure of intestine to EGFR antibody confirmed the localization of the EGFR to LBM and intracellular membranes. As estimated from the intensity of the staining, there may be immunologically active but nonbinding receptor species in the intracellular membrane compartment. Thus, despite the secretion of EGF into the intestinal lumen, the growth and maturational effects of EGF probably result from a specific interaction between EGF and EGFR solely at the laterobasal surface of the enterocyte. The functional role of the intracellular membrane species of EGFR, which remains to be established, may involve a source of inactive receptor that can be rapidly recruited and transferred to the LBM surface under changing environmental conditions.