Calnexin, a chaperone that resides in the endoplasmic reticulum, participates in the quality control function of this compartment. Many glycoproteins in the process of folding associate transiently with this chaperone via interactions involving the recognition of their mono-glucosylated glycans. Some misfolded proteins which are retained in the endoplasmic reticulum exhibit prolonged association with calnexin. We have examined whether the transmembrane and cytoplasmic domains of calnexin influence the association of this chaperone with its targets. Interactions of wild type and truncated calnexin with a glycoprotein that is retained in the endoplasmic reticulum (the lymphocyte tyrosine kinase, Ltk), with membrane IgM heavy chains, and with the MHC class I heavy chain protein were investigated. A soluble calnexin molecule lacking the transmembrane domain and cytoplasmic tail does not associate with any of these proteins. When a heterologous transmembrane domain is fused to the lumenal portion of calnexin, this membrane-bound protein can bind Ltk, IgM heavy chains, and MHC class I heavy chain proteins. These results suggest that calnexin must be membrane-anchored in order to recognize its substrates.