Transforming growth factor-alpha (TGF-alpha) is a mitogenically active polypeptide hormone produced by acutely proliferating neoplastic and embryonic tissues. Molecular cloning of TGF-alpha cDNA from human and rat has indicated that this factor is synthesized as part of a larger precursor, proTGF-alpha. An intriguing feature of proTGF-alpha is that it contains a sequence of 24 hydrophobic amino acids following the bioactive TGF-alpha sequence. Similar hydrophobic sequences present in transmembrane proteins are cotranslationally anchored into the phospholipid bilayer of the rough endoplasmic reticulum, suggesting the possibility that pro TGF-alpha might be an integral membrane protein. Other secretory proteins including all known prohormones lack membrane anchoring sequences and are completely translocated across the endoplasmic reticulum membrane. To address the question of whether proTGF-alpha is as an integral membrane protein we have translated rat proTGF-alpha mRNA transcripts in the presence of rough endoplasmic reticulum membrane vesicles. The results indicate that proTGF-alpha is synthesized as an integral membrane glycoprotein. The 50-amino-acid TGF-alpha sequence in proTGF-alpha is exposed to the fluid extracellular phase where it can be released after cleavage by the appropriate enzyme.