The interaction of anthrax toxin protective antigen (PA) and target cells was assessed, and the importance of the cytosolic domain of tumor endothelium marker 8 (TEM8) in its function as a cellular receptor for PA was evaluated. PA binding and proteolytic processing on the Chinese hamster ovary cell surface occurred rapidly, with both processes nearly reaching steady state in 5 min. Remarkably, the resulting PA63 fragment was present on the cell surface only as an oligomer, and furthermore, the oligomer was the only PA species internalized, suggesting that oligomerization of PA63 triggers receptor-mediated endocytosis. Following internalization, the PA63 oligomer was rapidly and irreversibly transformed to an SDS/heat-resistant form, in a process requiring an acidic compartment. This conformational change was functionally correlated with membrane insertion, channel formation, and translocation of lethal factor into the cytosol. To explore the role of the TEM8 cytosolic tail, a series of truncated TEM8 mutants was transfected into a PA receptor-deficient Chinese hamster ovary cell line. Interestingly, all of the cytosolic tail truncated TEM8 mutants functioned as PA receptors, as determined by PA binding, processing, oligomer formation, and translocation of an lethal factor fusion toxin into the cytosol. Moreover, cells transfected with a TEM8 construct truncated before the predicted transmembrane domain failed to bind PA, demonstrating that residues 321-343 are needed for cell surface anchoring. Further evidence that the cytosolic domain plays no essential role in anthrax toxin action was obtained by showing that TEM8 anchored by a glycosylphosphatidylinositol tail also functioned as a PA receptor.