The fate of the catalytic subunit of the Escherichia coli heat labile toxin (LTA(1)) was studied after expression in mammalian cells to assess the requirement for ADP-ribosylation factor (ARF) binding to localization and toxicity and ability to compete with endogenous ARF effectors. A progression in LTA(1) localization from cytosol to binding Golgi stacks to condensation of Golgi membranes was found to correlate with the time and level of LTA(1) expression. At the highest levels of LTA(1) expression the staining of LTA and both extrinsic and lumenal Golgi markers all became diffuse, in a fashion reminiscent of the actions of brefeldin A. Thus, LTA(1) binds to the Golgi and can alter its morphology in two distinct ways. However, point mutants of LTA(1) that are defective in the ability to bind activated ARF were also unable to bind Golgi membranes or modify Golgi morphology. Co-expression of mutants of ARF3 that regained binding to these same mutant LTA(1) proteins restored the localization and activities of the toxin. Thus, binding to ARF is required both for the localization of the toxin to the Golgi and for effects on Golgi membranes. A correlation was also seen between the ability of LTA mutants to bind ARF and the increase in cellular cAMP levels. These results demonstrate the importance of ARF binding to the toxicity and cellular effects of the ADP-ribosylating bacterial toxin and reveal that mutants defective in binding ARF retain basal ADP-ribosylation activity but are the least toxic LTA(1) mutants yet described, making them the best candidates for development as mucosal adjuvants.