The product of the Wnt-1 proto-oncogene is a cysteine-rich glycoprotein that plays a crucial role in the development of the vertebrate central nervous system. Wnt-1 protein is secreted but remains associated with the cell surface and extracellular matrix. The function of Wnt-1 in several different biological settings can be carried out by cells that receive the Wnt signal from adjacent cells. Ectopic expression of Wnt-1 in certain mammary gland cell lines, such as C57MG, causes morphological transformation; C57MG cells can also be transformed by a paracrine mechanism when mixed with other cell types secreting Wnt-1 protein. To ask whether Wnt-1 protein can function while bound to the cell of origin, a variety of cell types were programmed to produce chimeric proteins containing the complete sequence of mature Wnt-1 protein fused to part or all of the transmembrane protein CD4 or CD8. The chimeras were found at the cell surface of transfected cells and did not appear to be proteolytically processed. In autocrine and paracrine transformation assays with C57MG cells and in an axis induction assay in Xenopus laevis embryos, the Wnt-1/CD4 or CD8 fusions retained significant activity, as did a secreted chimera containing the CD8 extracellular domain but lacking the transmembrane domain. However, a chimera lacking a spacer between the Wnt-1 and the transmembrane domains was weakly active and only in autocrine transformation. These results show that tethering Wnt-1 to the cell surface still allows Wnt-1-mediated cell-to-cell signaling.