NKG2D is an important activating receptor on lymphocytes. In human, it interacts with two groups of ligands: the major histocompatibility complex class I chain-related A/B (MICA/B) family and the UL-16 binding protein (ULBP) family, also known as retinoic acid early transcript (RAET1). MIC proteins are membrane-anchored, but all of the ULBP/RAET1 proteins, except for RAET1E and RAET1G, are glycosylphosphatidylinositol (GPI)-anchored. To address the reason for these differences we studied the association of RAET1G with the membrane. Using epitope-tagged RAET1G protein in conjunction with antibodies to different parts of the molecule and in pulse-chase experiments, we showed that the C terminus of the protein was cleaved soon after protein synthesis. Endoglycosidase H and peptide N-glycosidase treatment and cell surface immunoprecipitation indicated that most of the protein stayed in the endoplasmic reticulum, but some of the cleaved form was modified in the Golgi and transported to the cell surface. We examined the possibility of GPI anchoring of the protein in three ways: (i) Phosphatidylinositol (PI)-specific phospholipase C released the PI-linked form of the protein. (ii) The surface expression pattern of RAET1G decreased in cells defective in GPI anchoring through mutant GPI-amidase. (iii) Site-directed mutagenesis, to disrupt residues predicted to facilitate GPI-anchoring, resulted in diminished surface expression of RAET1G. Thus, a form of RAET1G is GPI-anchored, in line with most other ULBP/RAET1 family proteins. The cytoplasmic tail and transmembrane domains appear to result from gene duplication and frameshift mutation. Together with our previous results, our data suggest that RAET1G is regulated post-translationally to produce a GPI-anchored isoform.