We identified a novel cystic fibrosis transmembrane conductance regulator (CFTR)-associating, PDZ domain-containing protein, CAL (CFTR associated ligand) containing two predicted coiled-coiled domains and one PDZ domain. The PDZ domain of CAL binds to the C terminus of CFTR. Although CAL does not have any predicted transmembrane domains, CAL is associated with membranes mediated by a region containing the coiled-coil domains. CAL is located primarily at the Golgi apparatus, co-localizing with trans-Golgi markers and is sensitive to Brefeldin A treatment. Immunoprecipitation experiments suggest that CAL exists as a multimer. Overexpression of CAL reduces CFTR chloride currents in mammalian cells and decreases expression, rate of insertion and half-life of CFTR in the plasma membrane. The Na ؉ /H ؉ exchanger regulatory factor, NHE-RF, a subplasma membrane PDZ domain protein, restores cell surface expression of CFTR and chloride currents. In addition, NHE-RF inhibits the binding of CAL to CFTR. CAL modulates the surface expression of CFTR. CAL favors retention of CFTR within the cell, whereas NHE-RF favors surface expression by competing with CAL for the binding of CFTR. Thus, the regulation of CFTR in the plasma membrane involves the dynamic interaction between at least two PDZ domain proteins.