The adhesion molecule CD58 is involved in intercellular adhesion and in signal transduction. It is natively expressed in both a transmembrane form and a glycosylphosphatidylinositol (GPI)-anchored form, and hence provides a model for the study of two distinct membrane-anchored forms of the same protein in the same cell. We demonstrate here that the two isoforms of CD58 are localized in distinct membrane compartments. The GPI-anchored form localizes in lipid rafts, while the transmembrane form resides in nonraft domains. In addition to distinct membrane localization, the two isoforms of CD58 differ in their association with protein kinases. GPI-anchored CD58, residing in raft domains, is constitutively associated with protein kinases. However, cross-linking mediates a substantial increase in kinase activity which is predominantly associated with the transmembrane CD58 in nonraft membrane domains. The extensive inducible kinase activity, associated with transmembrane CD58, is demonstrated in wild-type cells as well as in GPI-deficient variant cells. Thus, although the transmembrane CD58 is excluded from rafts, it may trigger signaling independently of the GPI-linked isoform.