The presence of a glycoinositol phospholipid anchor in Drosophila acetylcholinesterase (AChE) was shown by several criteria. Chemical analysis of highly purified Drosophila AChE demonstrated approximately one residue of inositol per enzyme subunit. Selective cleavage by Staphylococcus aureus phosphatidylinositol-specific phospholipase C (PI-PLC) was tested with Drosophila AChE radiolabeled by the photoactivatable affinity probe 3-(trifluoromethyl)-3-(m-[125I]iodophenyl)diazirine [( 125I]TID), a reagent that specifically labels the lipid moiety of glycoinositol phospholipid-anchored proteins. Digestion with PI-PLC released 75% of this radiolabel from the protein. Gel electrophoresis of Drosophila AChE in sodium dodecyl sulfate indicated prominent 55- and 16-kDa bands and a faint 70-kDa band. The [125I]TID label was localized on the 55-kDa fragment, suggesting that this fragment is the C-terminal portion of the protein. In support of this conclusion, a sensitive microsequencing procedure that involved manual Edman degradation combined with radiomethylation was used to determine residues 2-5 of the 16-kDa fragment. Comparison with the Drosophila AChE cDNA sequence [Hall, L.M.C., & Spierer, P. (1986) EMBO J. 5, 2949-2954] confirmed that the 16-kDa fragment includes the N-terminus of AChE. Furthermore, the position of the N-terminal amino acid of the mature Drosophila AChE is closely homologous to that of Torpedo AChE. The presence of radiomethylatable ethanolamine in both 16- and 55-kDa fragments was also confirmed. Thus, Drosophila AChE may include a second posttranslational modification involving ethanolamine.