Partitioning of proteins in cholesterol and sphingolipid enriched plasma membrane microdomains, called lipid rafts, is critical for many signal transduction and protein sorting events. Although raft partitioning of many signaling molecules remains to be determined, glycosylphosphatidyl-inositol (GPI)-anchored proteins possess high affinity for lipid rafts and are currently exploited as markers to investigate fundamental mechanisms in protein sorting and signal transduction events. In this study, we demonstrate that two recombinant GPI-anchored green fluorescent proteins (GFP-GPIs) that differ in their GPI signal sequence confer distinct localization in plasma membrane microdomains. GFP fused to the GPI signal of the decay accelerating factor GFP-GPI(DAF) partitioned exclusively in lipid rafts, whereas GFP fused to the GPI signal of TRAIL-R3, GFP-GPI(TRAIL-R3), associated only minimally with microdomains. In addition, we investigated the unique ability of purified GFP-GPIs to insert into membrane microdomains of primary lymphocytes. This cell surface painting allows rapid, stable, and functional association of the GPI-anchored proteins with the target cell plasma membrane. The distinct membrane localization of the two GFP-GPIs was observed irrespective of whether the GPI-anchored molecules were painted or transfected. Furthermore, we show that painted GFP-GPI(DAF) was totally dependent on the GPI anchor and that the membrane insertion was increased by the addition of raft-associated lipids such as cholesterol, sphingomyelin, and dipalmitoyl-phosphatidylethanolamine. Thus, this study provides evidence that different GPI signal sequences lead to distinct membrane microdomain localization and that painted GFP-GPI(DAF) serves as an excellent fluorescent marker for lipid rafts in live cells.