Glutamine synthetase (GS) plays a key role in two major biochemical pathways: In liver GS catalyzes ammonia detoxification, whereas in neural tissues it also functions in recycling of the neurotransmitter glutamate. In most species the GS gene gives rise to a cytoplasmic protein in both liver and neural tissues. However, in species that utilize the ureosmotic or uricotelic system for ammonia detoxification, the enzyme is cytoplasmic in neural tissues, but mitochondrial in liver cells. Since most vertebrates have a single copy of the GS gene, it is not clear how tissue-specific subcellular localization is achieved. Here we show that in the ureosmotic elasmobranch, Squalus acanthias (spiny dogfish), two different GS transcripts are generated by tissue-specific alternative splicing. The liver transcript contains an alternative exon that is not present in the neural one. This exon leads to acquisition of an upstream in-frame start codon and formation of a mitochondrial targeting signal (MTS). Therefore, the liver product is targeted to the mitochondria while the neural one is retained in the cytoplasm. These findings present a mechanism in which alternative splicing of an MTS-encoding exon is used to generate tissue-specific subcellular localization.