GLIAL-CELL-LINE-DERIVED neurotrophic factor (GDNF)(1) is a potent survival factor for central and peripheral neurons(2-6), and is essential for the development of kidneys and the enteric nervous system(7-9). Despite the potential clinical and physiological importance of GDNF, its mechanism of action is unknown. Here we show that physiological responses to GDNF require the presence of a novel glycosyl-phosphatidylinositol (GPI)-linked protein (designated GDNFR-alpha) that is expressed on GDNF-responsive cells and binds GDNF with a high affinity. We further demonstrate that GDNF promotes the formation of a physical complex between GDNFR-alpha and the orphan tyrosine kinase receptor Ret(10-12), thereby inducing its tyrosine phosphorylation. These findings support the hypothesis that GDNF uses a multi-subunit receptor system in which GDNFR-alpha and Ret function as the ligand-binding and signalling components, respectively.