Secreted and intracellular proteins including antibodies, cytokines, major histocompatibility complex molecules, antigens, and enzymes can be redirected to and anchored on the surface of mammalian cells to reveal novel functions and properties such as reducing systemic toxicity, altering the in vivo distribution of drugs and extending the range of useful drugs, creating novel, specific signaling receptors and reshaping protein immunogenicity. The present review highlights progress in designing vectors to target and retain chimeric proteins on the surface of mammalian cells. Comparison of chimeric proteins indicates that selection of the proper cytoplasmic domain and introduction of oligiosaccharides near the cell surface can dramatically enhance surface expression, especially for single-chain antibodies. We also describe progress and limitations of employing surface-tethered proteins for preferential activation of prodrugs at cancer cells, imaging gene expression in living animals, performing high-throughput screening, selectively activating immune cells in tumors, producing new adhesion molecules, creating local immune privileged sites, limiting the distribution of soluble factors such as cytokines, and enhancing polypeptide immunogenicity. Surface-anchored chimeric proteins represent a rich source for developing new techniques and creating novel therapeutics.