Glycosylphosphatidylinositol (GPI) acts as an apical targeting signal in MDCK cells and other kidney and intestinal cell lines. In striking contrast with these model polarized cell lines, we show here that Fischer rat thyroid (FRT) epithelial cells do not display a preferential apical distribution of GPI-anchored proteins. Six out of nine detectable endogenous GPI-anchored proteins were localized on the basolateral surface, whereas two others were apical and one was not polarized. Transfection of several model GPI proteins, previously shown to be apically targeted in MDCK cells, also led to unexpected results. While the ectodomain of decay accelerating factor (DAF) was apically secreted, 50% of the native, GPI-anchored form, of this protein was basolateral. Addition of a GPI anchor to the ectodomain of Herpes simplex gD-1, secreted without polarity, led to basolateral localization of the fusion protein, gD1-DAF. Targeting experiments demonstrated that gD1-DAF was delivered vectorially from the Golgi apparatus to the basolateral surface. These results indicate that FRT cells have fundamental differences with MDCK cells with regard to the mechanisms for sorting GPI-anchored proteins: GPI is not an apical signal but, rather, it behaves as a basolateral signal. The "mutant" behavior of FRT cells may provide clues to the nature of the mechanisms that sort GPI-anchored proteins in epithelial cells.