Glycosylphosphatidylinositols (GPIs) are membrane anchors for cell surface proteins of several major protozoan parasites of humans, including Trypanosoma cruzi, the causative agent of Chagas' disease, To investigate the general role of GPIs in T. cruzi, we generated GPI-deficient parasites by heterologous expression of T. brucei GPI-phospholipase C. Putative protein-GPI intermediates were depleted, causing the biochemical equivalent of a dominant-negative loss of function mutation in the GPI pathway, Cell surface expression of major GPI-anchored proteins was diminished in GPI-deficient T. cruzi, Four proteins that are normally GPI-anchored in T. cruzi exhibited different fates during the GPI shortage; Ssp-Li and p75 were secreted prematurely, while protease gp50/55 and p60 were degraded intracellularly. These observations demonstrate that secretion and intracellular degradation of GPI-anchored proteins may occur in the same genetic background during a GPI deficiency, We postulate that the interaction between a protein GPI transamidase and the COOH-terminal GPI signal sequence plays a pivotal role in determining the fate of these proteins, At a nonpermissive GPI deficiency, T. cruzi amastigotes inside mammalian cells replicated their single kinetoplast but failed at mitosis. Hence, in these protozoans, GPIs appear to be essential for nuclear division, but not for mitochondrial duplication.