The organic solute transporter, Ost/Slc51, is composed of two distinct proteins that must heterodimerize to generate transport activity, but the role of the individual subunits in mediating transport activity is unknown. The present study identified regions in Ostβ required for heterodimerization with Ostα, trafficking of the Ostα-Ostβ complex to the plasma membrane, and bile acid transport activity in HEK293 cells. Bimolecular fluorescence complementation analysis revealed that a 25-amino acid peptide containing the Ostβ transmembrane (TM) domain heterodimerized with Ostα, although the resulting complex failed to reach the plasma membrane and generate cellular [(3)H]taurocholate transport activity. Deletion of the single TM domain of Ostβ abolished interaction with Ostα, demonstrating that the TM segment is necessary and sufficient for formation of a heteromeric complex with Ostα. Mutation of the highly conserved tryptophan-asparagine sequence within the TM domain of Ostβ to alanines did not prevent cell surface trafficking, but abolished transport activity. Removal of the N-terminal 27 amino acids of Ostβ resulted in a transporter complex that reached the plasma membrane and exhibited transport activity at 30 °C. Complete deletion of the C terminus of Ostβ abolished [(3)H]taurocholate transport activity, but reinsertion of two native arginines immediately C-terminal to the TM domain rescued this defect. These positively charged residues establish the correct N(exo)/C(cyt) topology of the peptide, in accordance with the positive inside rule. Together, the results demonstrate that Ostβ is required for both proper trafficking of Ostα and formation of the functional transport unit, and identify specific residues of Ostβ critical for these processes.