PECAM-1/CD31, a vascular cell adhesion/signaling molecule that has been implicated in a number of vascular functions (including angiogenesis and the transmigration of leukocytes through endothelium) is highly enriched at the cell-cell borders of adjacent endothelial cells. To identify the mechanisms responsible for this localization, a series of PECAM-1 mutants and chimeric PECAM-1 molecules were transfected into non-PECAM-expressing cells and the ability of the constructs to move to cell-cell borders of adjacent cells was determined using immunohistochemistry and confocal microscopy. Although neither the extracellular domain, by itself, nor the cytoplasmic domain, by itself, was sufficient to direct cell-cell localization, the combination of the extracellular and transmembrane domains with a small group of highly charged amino acids in a membrane proximal region of the cytoplasmic domain was sufficient to direct efficient localization of the molecule to cell-cell borders. Importantly, only constructs that supported PECAM-1 mediated adhesion localized to cell-cell borders. Our data are consistent with a 'diffusion trapping' model in which movement of PECAM-1 in the cell membrane occurs relatively freely until the 'stablized' extracellular domain of the molecule encounters its ligand on an adjacent cell. When this occurs, the complex is 'captured' at the cell-cell interface leading to localization at cell-cell borders.