A mutant of CD4 (CD4.Q421stop), in which the cytoplasmic C-terminal 13 amino acids were truncated, was not expressed on the surface of HeLa cells after transfection but was retained in the endoplasmic reticulum (ER). Seven other truncation mutants of CD4 were expressed well on the cell surface, thus suggesting that the C-terminal amino acids of CD4.Q421stop (-Ser-Glu-Lys-Lys-Thr-Cys) may have the sequence information for ER retention. Further mutational study has revealed that two consecutive lysine residues at the third and fourth positions from the C-terminal end are sufficient for ER retention. Lysine at the fourth position, but not at the third position, from the C terminus can be replaced by arginine without disturbing ER retention. Furthermore, two lysine residues at the third and fifth positions from the C terminus also resulted in ER retention. Thus lysine at the third position and a positively charged amino acid either at the fourth or fifth position from the C terminus are sufficient for ER retention of this CD4 mutant, and possibly all transmembrane proteins. In addition to the requirement of specific amino acids at specific positions, the ER retention signal -Lys-Lys-Xaa-Xaa also requires a transmembrane region for function. By contrast -Lys-Asp-Glu-Leu, which targets soluble proteins to the lumen of the ER, does not function in the presence of a transmembrane region.