The GDNF family ligands (GFLs: GDNF, neurturin, persephin, and artemin) signal through RET and a glycosyl-phosphatidylinositol (GPI)-anchored coreceptor (GFRα1-α4) that binds ligand with high affinity and provides specificity. The importance of the GPI anchor is not fully understood; however, GPI-linked proteins cluster into lipid rafts, structures that may represent highly specialized signaling organelles. Here, we report that GPI-anchored GFRα1 recruits RET to lipid rafts after GDNF stimulation and results in RET/Src association. Disruption of RET localization using either transmembrane-anchored or soluble GFRα1 results in RET phosphorylation, but GDNF-induced intracellular signaling events are markedly attenuated as are neuronal differentiation and survival responses. Therefore, proper membrane localization of RET via interaction with a raft-localized, GPI-linked coreceptor is of fundamental importance in GFL signaling.