Vibrio cholerae and Escherichia coli heat labile toxins (CT and LT) elicit a secretory response from intestinal epithelia by binding apical receptors (ganglioside GM1) and subsequently activating basolateral effectors (adenylate cyclase). We have recently proposed that signal transduction in polarized cells may require transcytosis of toxin-containing membranes (Lencer, W. I., G. Strohmeier, S. Moe, S. L. Carlson, C. T. Constable, and J. L. Madara. 1995. Proc. Natl. Acad. Sci. USA. 92:10094-10098). Targeting of CT into this pathway depends initially on binding of toxin B subunits to GM1 at the cell surface. The anatomical compartments in which subsequent steps of CT processing occur are less clearly defined. However, the enzymatically active A subunit of CT contains the ER retention signal KDEL (RDEL in LT). Thus if the KDEL motif were required for normal CT trafficking, movement of CT from the Golgi to ER would be implied. To test this idea, recombinant wild-type (wt) and mutant CT and LT were prepared. The COOH-terminal KDEL sequence in CT was replaced by seven unrelated amino acids: LEDERAS. In LT, a single point mutation replacing leucine with valine in RDEL was made. Wt and mutant toxins displayed similar enzymatic activities and binding affinities to GM1 immobilized on plastic. Biologic activity of recombinant toxins was assessed as a Cl- secretory response elicited from the polarized human epithelial cell line T84 using standard electrophysiologic techniques. Mutations in K(R)DEL of both CT and LT delayed the time course of toxin-induced Cl- secretion. At T1/2, dose dependencies for K(R)DEL-mutant toxins were increased > or = 10-fold. KDEL-mutants displayed differentially greater temperature sensitivity. In direct concordance with a slower rate of signal transduction. KDEL-mutants were trafficked to the basolateral membrane more slowly than wt CT (assessed by selective cell surface biotinylation as transcytosis of B subunit). Mutation in K(R)DEL had no effect on the rate of toxin endocytosis. These data provide evidence that CT and LT interact directly with endogenous KDEL-receptors and imply that both toxins may require retrograde movement through Golgi cisternae and ER for efficient and maximal biologic activity.