Two phosphatidylinositol (PI)-anchored versions of a measles virus (MV) receptor membrane cofactor protein (MCP; CD46) were generated by fusing the extracellular domain of MCP to the decay-accelerating factor (DAF; CD55) or its PI anchor. The PI-anchored forms of MCP expressed on Chinese hamster ovary cells, otherwise non-permissive to MV, conferred a smaller MV cytopathic effect than a wild-type MCP, a Ser/Thr-rich domain-deletion mutant and a cytoplasmic tail-deletion mutant of MCP. Therefore the differences in MV receptor properties between the two PI-anchored and three transmembrane forms were investigated. The PI-anchored forms were predominantly expressed on microvilli as in DAF, whereas the other transmembrane forms were found on intracellular membranes. The PI-anchored forms conferred high MV-binding capacity compared with the transmembrane versions. MV replication was, however, severely suppressed in cells expressing the PI-anchored forms, resulting in ineffective syncytium formation. In contrast, cell-to-cell fusion occurred efficiently after co-transfection of cDNA species encoding MV-H. MV-F and any version of MCP. Thus the PI-anchored forms, despite showing sufficient MV binding and cell-to-cell fusion competence together with MV-H and MV-F, mediate inefficient MV entry or replication, which causes severe suppression of the MV cytopathic effect. A biased receptor distribution on microvilli might participate in the selection of a low MV uptake pathway in the PI-anchored forms of MCP. Taken together, the transmembrane portion of MCP is a critical factor for effective virus-cell fusion and the subsequent MV replication.