Ly-6E, a glycosyl phosphatidylinositol (GPI)-anchored murine alloantigen that can activate T cells upon antibody cross-linking, has been converted into an integral membrane protein by gene fusion. This fusion product, designated Ly-6EDb, was characterized in transiently transfected COS cells and demonstrated to be an integral cell surface membrane protein. Furthermore, the fusion antigen can be expressed on the surface of the BW5147 class "E" mutant cell line, which only expresses integral membrane proteins but not GPI-anchored proteins. The capability of this fusion antigen to activate T cells was examined by gene transfer studies in D10G4.1, a type 2 T cell helper clones. When transfected into D10 cells, the GPI-anchored Ly-6E antigen, as well as the endogenous GPI-anchored Ly-6A antigen, can initiate T cell activation upon antibody cross-linking. In contrast, the transmembrane anchored Ly-6EDb antigen was unable to mediate T cell activation. Our results demonstrate that the GPI-anchor is critical to Ly-6A/E-mediated T cell activation.