This study investigates the role of the cytoplasmic C terminus of fatty acid translocase (FAT/CD36) in localization of the molecule to the plasma membrane, its insertion into lipid rafts, and its ability to enhance long-chain fatty acid uptake in transfected H4IIE rat hepatoma cells. In these cells, wild-type FAT/CD36 is localized to both lipid raft and nonraft domains of the plasma membrane. Interestingly, a FAT/CD36 truncation mutant lacking the final 10 amino acids of the cytoplasmic C terminus was retained within the cell in detergent-resistant membranes, and unlike wild-type FAT/CD36, it did not enhance oleate uptake. Furthermore, expression of FAT/CD36 in these cells increased the incorporation of oleate into diacylglycerol, a property that was not shared by truncated FAT/CD36. To examine whether the C terminus itself has an intrinsic ability to dictate the plasma membrane localization of FAT/CD36, this region was fused in-frame to enhanced green fluorescent protein (EGFP). This domain was sufficient to attach EGFP to cellular membranes, suggesting an involvement in the intracellular traffic of the molecule. We conclude that the C terminus of FAT/CD36 is required for localization of the receptor to the cell surface and its ability to enhance cellular oleate uptake.