The small GTPase rab4 is associated with early endosomes and regulates membrane recycling in fibroblasts. rab4 is present in epithelial cells; however, neither its localization nor function has been established in this cell type. We transfected Madin-Darby canine kidney cells with rab4, the GTPase-deficient mutant rab4Q67L, and the dominant negative mutant rab4S22N that poorly binds guanine nucleotides. Confocal immunofluorescence microscopy showed that rab4 was concentrated on internal structures at the lateral side of the cell around the nucleus. Quantitative immunoelectron microscopy revealed that the majority of rab4 was localized in the upper third of the cytoplasm. In cell surface binding experiments with (125)I-transferrin, we found a redistribution of transferrin receptor from the basolateral to the apical plasma membrane in cells expressing rab4 and rab4Q67L. After accumulation of transferrin at 16 degrees C in basolateral early endosomes, rab4 and rab4Q67L increased the amount of apically targeted transferrin receptor. A qualitatively similar effect was obtained in control cells treated with brefeldin A. The effects of brefeldin A and rab4 on apical targeting of transferrin receptor were not additive, suggesting that brefeldin A and rab4 may act in the same transport pathway from common endosomes.