We have characterized the molecular nature of mutations in wingless (wg), a segment polarity gene acting during various stages of Drosophila development. Embryo-lethal alleles have undergone mutations in the protein-encoding domain of the gene, including deletions and point mutations of conserved residues. In a temperature sensitive mutation, a conserved cysteine residue is replaced by a serine. In embryo-viable alleles, the wg transcriptional unit is not affected. Immunostaining of mutant embryos shows that the embryo-lethal alleles produce either no wg antigen or a form of the protein that is retained within cells. Interestingly, embryos mutant for the segment polarity gene porcupine show a similar retention of the wg antigen. We have also transfected wild type wg alleles into Drosophila tissue culture cells, which then display wg protein on the cell surface and in the extracellular matrix. In similar experiments with mutant alleles, the proteins are retained in intracellular compartments and appear not to be secreted. These data provide further evidence that wg acts as a secreted factor and suggest that porcupine provides an accessory function for wg protein secretion or transport.