CD20 is a B lymphocyte integral membrane protein with signal-transducing properties. Abs directed toward extracellular CD20 epitopes activate nonreceptor tyrosine kinases and modulate cell cycle progression of B lymphocytes. Recently, we demonstrated that binding of CD20 Abs to B cells induces the rapid redistribution of up to 95% of CD20 molecules to low density, detergent-insoluble membrane microdomains and induces the appearance of an approximately 50-kDa tyrosine-phosphorylated protein in the same compartment. Active relocalization of CD20 may thus be critical to the initiation of signaling events by CD20. The CD20 cDNA sequence predicts a nonglycosylated protein with four transmembrane-spanning regions and intracellular amino and carboxyl termini. Here we provide verification of the location of both the intracellular and extracellular regions of the CD20 molecule and identify a membrane-proximal sequence in the cytoplasmic carboxyl tail that is required for CD20 to redistribute to detergent-insoluble membrane microdomains.