Various aspects of the biogenetic mechanisms that are involved in the insertion of nascent plasma membrane proteins into the endoplasmic reticulum (ER) membrane and their subsequent distribution through the cell have been investigated. For these studies chimeric genes that encode hybrid proteins containing carboxy-terminal portions of the influenza virus hemagglutinin (154 amino acids) or the vesicular stomatitis virus envelope glycoprotein (G) (60 amino acids) linked to the carboxy terminus of a nearly complete secretory polypeptide, growth hormone (GH), were used. In in vitro transcription-translation experiments, it was found that the insertion signal in the GH portion of the chimeras led to incorporation of the membrane protein segments into the ER membrane. Effectively, GH became part of the luminal segment of membrane proteins of which only very small segments, corresponding to the cytoplasmic portions of the G or HA proteins, remained exposed on the surface of the microsomes. When the chimeric genes were expressed in transfected cells, the products, as expected, failed to be secreted and remained cell-associated. These results support the assignment of a halt transfer role to segments of the membrane polypeptides that include their transmembrane portions. The hybrid polypeptide containing the carboxy-terminal portion of HA linked to GH accumulated in a juxtanuclear region of the cytoplasm within modified ER cisternae, closely apposed to the Golgi apparatus. The location and appearance of these cisternae suggested that they represent overdeveloped transitional ER elements and thus may correspond to a natural way station between the ER and the Golgi apparatus, in which further transfer of the artificial molecules is halted. The GH-G hybrid could only be detected in transfected cells treated with chloroquine, a drug that led to its accumulation in the membranes of endosome or lysosome-like cytoplasmic vesicles. Although the possibility that the chimeric protein entered such vesicles directly from the Golgi apparatus cannot be ruled out, it appears more likely that it was first transferred to the cell surface and was then internalized by endocytosis.