VIP21 is a 21 kDa membrane protein present in TGN-derived transport vesicles isolated from the epithelial MDCK cell line. The membrane topology and subcellular localization of VIP21 were studied using antibodies against the N- and C-terminal domains. The protein was found to have a structure with little or no exposure to the exoplasmic side of the membrane. VIP21 was localized to the TGN, consistent with its presence in TGN-derived transport vesicles. Unexpectedly, it was also very abundant in the non-clathrin-coated plasma membrane invaginations called caveolae. We have previously proposed that VIP21 is associated with glycosphingolipid-enriched membrane domains in the TGN which may be involved in the sorting of proteins into vesicles directed to the apical plasma membrane. Caveolae are specialized lipid structures with similarities to the glycolipid microdomains in the TGN. The presence of VIP21 in both locations suggests that the mechanisms governing inclusion of proteins into caveolar plasma membrane domains are related to the processes of protein and lipid sorting at the TGN. This connection is confirmed by the recent finding that the amino acid sequence of VIP21 is almost identical to that of caveolin, a protein previously localized to caveolae.