Ectopic expression of various members of the human carcinoembryonic antigen (CEA) family of intercellular adhesion molecules in murine myoblasts either blocks (CEA, CEACAM6) or allows (CEACAM1) myogenic differentiation. These surface glycoproteins form a subset of the immunoglobulin (Ig) superfamily and are very closely related, but differ in the precise sequence of their external domains and in their mode of anchorage to the cell membrane. CEA and CEACAM6 are glycophosphatidyl-inositol (GPI) anchored, whereas CEACAM1 is transmembrane (TM) anchored. Overexpression of GPI-linked neural cell adhesion molecule (NCAM) p125, also an adhesion molecule of the Ig superfamily, accelerates myogenic differentiation. The molecular requirements for the myogenic differentiation block were investigated using chimeric constructs in which the COOH-terminal hydrophobic domains of CEA, CEACAM1, and NCAM p125 were exchanged. The presence of the GPI signal sequence specifically from CEA in the chimeras was sufficient to convert both CEACAM1 and NCAM into differentiation-blocking proteins. Conversely, CEA could be converted into a neutral protein by exchanging its GPI anchor for the TM anchor of CEACAM1. Since the external domains of CEA, CEACAM1, and NCAM can all undergo homophilic interactions, and mutations in the self-adhesive domains of CEA abrogate its differentiation-blocking activity, the structural requirements for differentiation-inhibition are any self-adhesive domains attached to the specific GPI anchor derived from CEA. We therefore suggest that biologically significant functional information resides in the processed extreme COOH terminus of CEA and in the GPI anchor that it determines.