Each subunit of the human transferrin receptor (TR) dimer is inserted into the ER membrane as a transmembrane polypeptide having its N-terminus in the cytoplasm. The transmembrane segment of the molecule serves both as a signal for chain translocation and as a membrane anchor. To study which structural features of this segment are required for its dual function, we have essentially replaced the transmembrane peptide with the C-terminal membrane-spanning segment of two proteins having a separate N-terminal translocation signal and with an artificial uncharged peptide. In each case the mutant TR molecules are efficiently translocated in vitro. In contrast, substitution of the transmembrane peptide of TR with a hydrophilic peptide results in no detectable translocation activity of the mutant TR. This suggests that the hydrophobic character of the transmembrane peptide of TR, rather than its actual amino acid sequence, is important for chain translocation and membrane binding.