Epidermal Growth Factor-Cripto-1/FRL-1/Cryptic (EGF-CFC) proteins, including human Cripto-1 (hCFC2/hCR-1) and human Cryptic (hCFC1), are membrane-associated Nodal co-receptors, which have critical roles in vertebrate development. Most of the EGF-CFC proteins have been experimentally proven or predicted to be glycosylphosphatidylinositol (GPI)-anchored proteins. However, unlike other EGF-CFC proteins, hCFC1 does not exhibit a typical GPI-signal sequence, containing a 32-amino acid hydrophilic extension in its COOH-terminal end. Here we experimentally demonstrate that the COOH-terminal sequence of hCFC1 functions as a GPI-anchoring signal. Moreover, addition of a hydrophilic epitope tag of 55-amino acids (V5-His) after the GPI signal of hCR-1 interfered with generation of a GPI-anchored form of hCR-1. In contrast, addition of the same epitope tag to the end of GPI signal of hCFC1 did not affect the GPI-attachment of hCFC1. The COOH-terminal signal of hCFC1 could produce two different forms of the protein; a GPI-anchored form and an unprocessed form which was more prone to be secreted into the conditioned medium. The hydrophilic extension of hCFC1 negatively regulates the activity of hCFC1 as a Nodal co-receptor. These results demonstrate the presence of endogenous GPI-signal sequence with a hydrophilic extension, which can generate both GPI-anchored and soluble forms of the protein.