Cripto-1 (CR-1) is a glycosylphosphatidylinositol-anchored glycoprotein which acts as an obligate co-receptor of a TGF beta family ligand, Nodal. Previous studies have demonstrated that CR-1 functions in a paracrine fashion by a cellular mechanism which has not been fully described. This paracrine activity was observed only when CR-1 was expressed as a membrane-bound form and was abolished when CR-1 was expressed in a soluble form. In the current study, we found that there were few biochemical differences in post-translational modifications between membrane-anchored and soluble forms of CR-1. Flow cytometric analysis revealed an intercellular transfer of the membrane-bound form of CR-1 between cells. CR-1-expressing cells formed unique membrane extensions, generated more membrane fragments than control cells, and exhibited enhanced cellular adhesion. Thus, expression of CR-1 may alter the physiochemical properties of the plasma membrane resulting in an enhancement of intercellular transfer of cellular signaling components which may account for the paracrine activity of CR-1. Published by Elsevier Inc.