Glycosylphosphatidylinositol (GPI)-anchored proteins are synthesized on membrane-bound ribosomes, translocated across the endoplasmic reticulum membrane, and GPI-anchored by GPI transamidase (GPIT). GPIT is a minimally heterotetrameric membrane protein complex composed of Gaa1, Gpi8, PIG-S and PIG-T. We describe structure-function analyses of Gaa1, the most hydrophobic of the GPIT subunits, with the aim of assigning a functional role to the different sequence domains of the protein. We generated epitope-tagged Gaa1 mutants and analyzed their membrane topology, subcellular distribution, complex-forming capability, and ability to restore GPIT activity in Gaa1-deficient cells. We show that (i) detergent-extracted, Gaa1-containing GPIT complexes sediment unexpectedly rapidly at approximately 17 S, (ii) Gaa1 is an endoplasmic reticulum-localized membrane glycoprotein with a cytoplasmically oriented N terminus and a lumenally oriented C terminus, (iii) elimination of C-terminal transmembrane segments allows Gaa1 to interact with other GPIT subunits but renders the resulting GPIT complex nonfunctional, (iv) interaction between Gaa1 and other GPIT subunits occurs via the large lumenal domain of Gaa1 located between the first and second transmembrane segments, and (v) the cytoplasmic N terminus of Gaa1 is not required for formation of a functional GPIT complex but may act as a membrane-sorting determinant directing Gaa1 and associated GPIT subunits to an endoplasmic reticulum membrane domain.