P-selectin is an integral membrane glycoprotein that is stored in granules of endothelial cells and platelets. The cytoplasmic domain of P-selectin is known to contain at least part of the signal that directs the protein to storage granules. In order to more fully understand how P-selectin is targeted to the regulated secretory pathway, we have expressed chimeric constructs between P- and E-selectin, a protein which is expressed on the cell surface, in a rat insulinoma cell line. Immunofluorescence studies indicated that replacing the cytoplasmic domain of E-selectin with that of P-selectin resulted in low-level granular expression. In contrast, when both the transmembrane and cytoplasmic domains of E-selectin were replaced with the analogous domains of P-selectin, the granular localization appeared greatly increased. This was confirmed by immunoelectron microscopy which demonstrated a three- to fourfold improvement in granular targeting, i.e. similar to wild-type P-selectin. The transmembrane domain had to be in the context of the P-selectin cytoplasmic domain as this membrane-spanning region could not induce granular targeting on its own. These results describe a novel function for the transmembrane domain of P-selectin in enhancing the efficiency of granular targeting and further implicate protein transmembrane domains in intracellular trafficking.