Affinity chromatography on galactose-Sepharose has been utilized to demonstrate that rat liver asialoglycoprotein receptor synthesized in vitro in a reticulocyte lysate system is capable of binding carbohydrate ligand only when dog pancreas microsomes are present during translation. Analysis of receptor isolated from tunicamycin-treated rat hepatocytes indicates that glycosylation is not necessary for receptor activity. Genetically engineered receptor derivatives in which the natural membrane anchor is either deleted entirely or replaced with a cleavable signal sequence derived from dog preproinsulin have been used to demonstrate that: (a) inactive receptor made in the absence of membranes does not result from incorrect nucleation of folding around the hydrophobic portion of the polypeptide which is normally buried in the membrane and (b) the carbohydrate-binding domain of the receptor does not need to be tethered to the luminal side of the membrane to fold correctly. These results suggest that factors within the lumen of the microsomes are essential to establish the native conformation of the binding domain.