The mode of integration of the glycoprotein thy-1 within the cell membrane has been controversial due to an apparent lack of a transmembrane hydrophobic segment. Rat and mouse complementary DNA and genomic clones encoding the thy-1 molecule have been isolated and sequenced. These studies have enabled us to determine the intron-exon organization of the thy-1 gene. Furthermore, they have revealed the existence of a sequence which would encode an extra segment (31 amino acids) at the carboxyl terminus of the thy-1 molecule. These extra amino acids include a 20-amino acid hydrophobic segment which may be responsible for integration of thy-1 within the plasma membrane.