Despite undergoing normal development and acquiring normal morphology and motility, mutations in spe-38 or trp-3/spe-41 cause identical phenotypes in Caenorhabditis elegans-mutant sperm fail to fertilize oocytes despite direct contact. SPE-38 is a novel, four-pass transmembrane protein and TRP-3/SPE-41 is a Ca(2+)-permeable channel. Localization of both of these proteins is confined to the membranous organelles (MOs) in undifferentiated spermatids. In mature spermatozoa, SPE-38 is localized to the pseudopod and TRP-3/SPE-41 is localized to the whole plasma membrane. Here we show that the dynamic redistribution of TRP-3/SPE-41 from MOs to the plasma membrane is dependent on SPE-38. In spe-38 mutant spermatozoa, TRP-3/SPE-41 is trapped within the MOs and fails to reach the cell surface despite MO fusion with the plasma membrane. Split-ubiquitin yeast-two-hybrid analyses revealed that the cell surface localization of TRP-3/SPE-41 is likely regulated by SPE-38 through a direct protein-protein interaction mechanism. We have identified sequences that influence the physical interaction between SPE-38 and TRP-3/SPE-41, and show that these sequences in SPE-38 are required for fertility in transgenic animals. Despite the mislocalization of TRP-3/SPE-41 in spe-38 mutant spermatozoa, ionomycin or thapsigargin induced influx of Ca(2+) remains unperturbed. This work reveals a new paradigm for the regulated surface localization of a Ca(2+)-permeable channel.