PKD2, the second gene for the autosomal dominant polycystic kidney disease (ADPKD), encodes a protein, polycystin-2, with predicted structural similarity to cation channel subunits. However, the function of polycystin-2 remains unknown. We used polyclonal antisera specific for the intracellular NH(2) and COOH termini to identify polycystin-2 as an approximately 110-kDa integral membrane glycoprotein. Polycystin-2 from both native tissues and cells in culture is sensitive to Endo H suggesting the continued presence of high-mannose oligosaccharides typical of pre-middle Golgi proteins. Immunofluorescent cell staining of polycystin-2 shows a pattern consistent with localization in the endoplasmic reticulum. This finding is confirmed by co-localization with protein-disulfide isomerase as determined by double indirect immunofluorescence and co-distribution with calnexin in subcellular fractionation studies. Polycystin-2 translation products truncated at or after Gly(821) retain their exclusive endoplasmic reticulum localization while products truncated at or before Glu(787) additionally traffic to the plasma membrane. Truncation mutants that traffic to the plasma membrane acquire Endo H resistance and can be biotinylated on the cell surface in intact cells. The 34-amino acid region Glu(787)-Ser(820), containing two putative phosphorylation sites, is responsible for the exclusive endoplasmic reticulum localization of polycystin-2 and is the site of specific interaction with an as yet unidentified protein binding partner for polycystin-2. The localization of full-length polycystin-2 to intracellular membranes raises the possibility that the PKD2 gene product is a subunit of intracellular channel complexes.