Although many organic anion transport protein (Oatp) family members have PDZ consensus binding sites at their C termini, the functional significance is unknown. In the present study, we utilized rat Oatp1a1 (NM_017111) as a prototypical member of this family to examine the mechanism governing its subcellular trafficking. A peptide corresponding to the C-terminal 16 amino acids of rat Oatp1a1 was used to affinity-isolate interacting proteins from rat liver cytosol. Protein mass fingerprinting identified PDZK1 as the major interacting protein. This was confirmed by immunoprecipitation of an Oatp1a1-PDZK1 complex from cotransfected 293T cells as well as from native rat liver membrane extracts. Oatp1a1 bound predominantly to the first and third PDZ binding domains of PDZK1, whereas the high density lipoprotein receptor, scavenger receptor B type I binds to the first domain. Although it is possible that PDZK1 forms a complex with these two integral membrane proteins, this did not occur, suggesting that as yet undescribed factors lead to selectivity in the interaction of these protein ligands with PDZK1. Oatp1a1 protein expression was near normal in PDZK1 knock-out mouse liver. However, it was located predominantly in intracellular structures, in contrast to its normal basolateral plasma membrane distribution. Plasma disappearance of the Oatp1a1 ligand [35S]sulfobromophthalein was correspondingly delayed in knock-out mice. These studies show a critical role for oligomerization of Oatp1a1 with PDZK1 for its proper subcellular localization and function. Because its ability to transport substances into the cell requires surface expression, this must be considered in any assessment of physiologic function.