When fused in-frame with a C-terminal propeptide of placental alkaline phosphatase (PLAP), rat alpha 2u-globulin (alpha GL), a nonglycosylated secretory protein, was expressed on the cell surface as a glycosylphosphatidylinositol (GPI)-linked chimaeric protein (alpha GL-PLAP). In contrast with the wild-type alpha GL-PLAP, a mutant, in which Asp at the cleavage/attachment site of GPI was replaced by Trp, failed to become a GPI-linked mature form and was retained as a precursor form within the cell [Oda, Cheng, Saku, Takami, Sohda, Misumi, Ikehara and Millán (1994) Biochem. J. 301, 577-583]. To elucidate the molecular interactions involved in the retention of the proform within the cell, we examined the association of the proform with molecular chaperones in the endoplasmic reticulum (ER). Antibody against the ER retrieval motif KDEL coimmunoprecipitated a 25 kDa proform, but not a 22 kDa GPI-linked mature form. Pulse-chase experiments showed that the wild-type alpha GL-PLAP with a cleavable propeptide was converted into the mature form, whereas the mutant alpha GL-PLAP with an uncleavable propeptide remained associated with ER-resident proteins with a KDEL motif and underwent rapid degradation in a pre-Golgi compartment. Chemical cross-linking studies showed that, of the several ER-resident proteins immunoreactive with the anti-KDEL antibody, a 78 kDa protein was the only protein associated with the proform. Furthermore this 78 kDa protein was dissociated from the precursor molecule on incubation with ATP, allowing us tentatively to assign it as Bip/GRP78. Anticalnexin antibody, however, failed to coprecipitate any form of the chimaeric protein. Immunoelectron microscopy showed that the proform with the uncleavable propeptide was localized in the ER, but not detected in the Golgi apparatus or plasma membranes. Taken together, these results suggest that Bip/GRP78 is associated with pro alpha GL-PLAP and retains it within the ER until pro alpha GL-PLAP is either modified by GPI or degraded, thereby participating in the quality control of this GPI-linked chimaeric protein.