Protein trafficking along the exocytotic pathway occurs by vesicular transport between successive membranous compartments. Transport from the endoplasmic reticulum (ER) to the Golgi apparatus has been proposed to be bridged by a morphologically defined ER-Golgi intermediate compartment (ERGIC). Using the subcellular dynamics of two markers for the ERGIC, the 53 kDa protein ERGIC53 and the mammalian KDEL receptor (KDEL-R), we have investigated the biochemical and physiological characteristics of ER-Golgi anterograde and retrograde transport. The KDEL-R at steady state is mainly confined to the perinuclear Golgi region while the ERGIC53 has a more elaborate distribution, including the ER. Both proteins can be colocalized to spotty structures distributed throughout the cytoplasm by incubating the cells at 15 degrees C. Upon returning the cells to 37 degrees C, the direction of transport for the two proteins diverged. KDEL-R was seen to emanate into tubular structures which eventually culminated in a focused, perinuclear staining. These dynamic changes are consistent with the anterograde transport process from the ER to the Golgi apparatus. ERGIC53, on the other hand, was distributed into an extended reticular network as well as the nuclear envelope, a staining pattern characteristic of the ER. With time, ERGIC53 was seen to return to the spotty structures again. The ER retrieval of ERGIC53 is consistent with the fact that the protein contains a dilysine motif which may function as an ER retrieval signal. The movement of ERGIC53 into the ER is not affected by microtubule disrupting agents, which inhibit the movement of KDEL-R to the Golgi. Both the processes are, however, sensitive to the alkylating agent N-ethylmaleimide. When reconstituted in vitro using digitonin permeabilized cells, the movement of ERGIC53 into the ER has a requirement for metabolic energy, is partially inhibited by the nonhydrolyzable guanine nucleotide analog GTP gamma S but could not be made to be cytosol dependent. These results documented the convergence of anterograde transport and retrograde transport at the 15 degrees C compartment and implied the existence of a segregation or a sorting process that would result in the segregation of proteins with different targeting signals in the structure.