The intracellular distribution of specific protease, plasminogen activator (PA), has been examined in Rous sarcoma virus-transformed chick embryo fibroblasts (RSV-CEF). Cellular homogenates were fractionated by differential centrifugation followed by sucrose gradient centrifugation. The activities and the percent distribution of a series of marker enzymes, specific for different subcellular organelles, were compared to those of PA. Normal CEF have been similarly fractionated and the relatively low amount of PA activity present in these cells has been analyzed in terms of its subcellular distribution. A membrane fraction was isolated from the RSV-CEF that contained the bulk of the PA activity and less than 8% of the total cellular protein. The specific activity of the PA in this fraction is 40-fold higher than that of a comparable fraction isolated from companion cultures of normal cells. This fraction contains little or no nuclear and cytoplasmic material and is contaminated only to a relatively small degree with mitochondria, lysosomes, endoplasmic reticulum. Significant amounts of a putative Golgi membrane marker are present in this fraction. The relatively high specific activities of Na+,K+-ATPase, 5'-nucleotidase, and [3H]fucose indicate that the fraction is enriched in surface membrane. Further purification of the fraction by equilibrium centrifugation on shallow sucrose gradients reduces further the contaminating activities and results in a PA distribution that closely parallels the distribution of the membrane enzyme, 5'-nucleotidase. PA was not released from its membrane association by hypotonic and hypertonic extraction and ultrasonication, while granule-bound enzymes were released by these treatments. The PA activity from hamster SV40 cells fractionated the same way as that of RSV-CEF. These results suggest that a protease that is dramatically enhanced upon malignant transformation is associated with "plasma membrane-like" elements of the cell and may serve as an intrinsic modifier of cell surface proteins after malignant transformation.