Cerebroside sulfotransferase (CST) catalyzes the final step in the synthesis of sulfatide (sulfogalactocerebroside) by transferring the sulfate from 3'-phosphoadenosine 5'-phosphosulfate (PAPS) to galactocerebroside. Orientation of CST was studied in vesicles enriched in this enzyme obtained from 21-d-old rat brain. Several lines of evidence indicate that CST is located on the luminal side of these vesicles. (a) Sulfation of endogenous galactocerebroside occurred in vesicles only in the presence of a detergent to render the membranes permeable to exogenous PAPS. (b) There is a pool of latent enzyme within the vesicle, which is released by Triton X-100. (c) CST is not destroyed by trypsin unless the vesicle membranes are first made permeable by Triton X-100. (d) Glycolipid substrate, when covalently attached to agarose beads, was not sulfated unless the enzyme was solubilized. These results are similar to those obtained with thiamine pyrophosphatase, which is known to be located within the lumen of the vesicles. This study establishes that an enzyme synthesizing a complex glycolipid is localized within Golgi-enriched vesicles. Since the product of the CST reaction must also be localized to the luminal side of the vesicles, it is most likely that sulfatide is located at the intraperiod line (outer layer) of myelin. The orientation of CST within the vesicle provides a mechanism for the asymmetrical assembly of glycolipids in bilayers.