The 120-kDa Bacillus thuringiensis CryIAc-binding aminopeptidase N (APN: EC 3.4.11.2) located in the Manduca sexta brush border has a glycosyl-phosphatidylinositol (GPI) membrane anchor. The GPI anchor causes the toxin-binding APN to form a tight aggregate with other proteins in brush border membrane preparations solubilized by non-ionic detergents, We report that an endogenous phosphatidylinositol-specific phospholipase C (PIPLC) cleaves the lipid moiety from the GPI anchor converting aggregated 120-kDa APN to a free 115-kDa form, The 115-kDa CryIAc-binding APN was readily purified by a combination of gel filtration and anion exchange chromatography, Based on APN activity, toxin binding, and N-terminal amino acid sequence analyzes, we showed that the 115- and 120-kDa APN are two forms of the same protein, Purified 115-kDa protein is recognized on protein blots by antibodies recognizing the cross-reacting determinant (CRD) found on PIPLC-solubilized proteins. Purification using a CryIAc toxin column followed by anion exchange chromatography also resulted in both 115-kDa free and 120-kDa aggregated forms of APN. The presence of an endogenous PIPLC in M. sexta brush border cells suggests a mechanism by which insects might release a toxin-binding protein from the target epithelia into the midgut lumen.