The E5 oncoprotein of BPV-1 is a 44 amino acid, hydrophobic polypeptide which is present in membrane fractions of transformed cell homogenates. To define the specific cellular membrane compartments with which E5 associates, immunofluorescence and immunoelectron microscopy were performed using an affinity-purified antibody specific for the E5 carboxyl-terminus. Two cell systems which overexpressed the E5 protein were analyzed: (1) Balb/c 3T3 mouse cells transformed by a BPV-1 cDNA expressing the E2-E5 ORFs, and (2) Sf9 insect cells infected with recombinant baculovirus expressing the E5 ORF. In both cell types, E5 protein was found in the membranes of the Golgi apparatus with its carboxyl-terminus oriented intraluminally. In the Sf9 cells, which synthesize much greater quantities of viral protein, E5 protein was observed additionally in plasma membranes with the carboxyl-terminus facing extracellularly. The concentration of E5 protein within the Golgi and plasma membranes suggests several potential mechanisms for inducing cellular transformation.