The type II membrane protein p63 is a resident protein of a membrane network interposed between rough ER and Golgi apparatus. To study the retention of p63, mutant forms were expressed in COS cells and the intracellular distribution determined by immunofluorescence microscopy. Investigation of chimeric constructs between p63 and the plasma membrane protein dipeptidylpeptidase IV showed that protein sequences from all three domains of the p63 protein are required to achieve complete intracellular retention. Mutational analysis of the 106-amino acid cytoplasmic tail of p63 revealed that the NH2-terminal 23 amino acids are necessary for retention. When p63 was solubilized with Triton X-100 and subjected to centrifugation at 100,000 g, it formed large, insoluble oligomers, particularly at neutral pH and below. A comparison of the behavior of wildtype and mutant p63 proteins in this assay revealed a perfect correlation between the formation of large oligomers and correct intracellular retention. These results suggest that self-association may be a major mechanism by which p63 is retained between the rough ER and the Golgi apparatus.