Glycosylphosphatidylinositol (GPI)-anchored cell wall proteins play an important role in the structure and function of the cell wall in yeast and other fungi. Although the majority of characterized fungal GPI-anchored proteins do in fact localize to the cell wall, some are believed to reside at the plasma membrane and not to traffic significantly to the cell wall. There is evidence suggesting that the amino acids immediately upstream of the site of GPI anchor addition (the omega site) serve as the signal determining whether a GPI protein localizes to the cell wall or to the plasma membrane, although this remains controversial. Here, we examine in detail the functional and biochemical differences between the GPI anchor addition signals of putative cell wall (CW) and plasma membrane (PM) GPI proteins. We find strong evidence for the existence of PM-class and CW-class GPI proteins. We show that the biological function of a GPI-CWP is strongly compromised by changing the GPI anchor signal from a CW-class signal to a PM-class signal. Biochemically, this abrogation of function corresponds to a change in the protein from a cell wall form to a membrane form. To understand better the basis for the difference between the two classes of proteins, we mutated the amino acids upstream of the omega site in a GPI-PM protein and selected mutant proteins that were now localized to the cell wall. We were also able to design simple amino acid mutations in a GPI-CW protein that efficiently redirected the protein to the plasma membrane. These studies make clear that different GPI anchor sequences can have dramatic effects on localization of the proteins and help to define the GPI anchor addition signal sequences that distinguish the PM-class and CW-class GPI proteins.