Cripto-1 (CR-1) has an indispensable role as a Nodal coreceptor for patterning of body axis in embryonic development. CR-1 is reported to have a paracrine activity as a Nodal co-receptor, although CR-1 is primarily produced as a glycosylphosphatidylinositol (GPI)-anchored membrane protein.Regulation of cis and trans function of CR-1 should be important to establish the precise body patterning. However, the mechanism by which GPI-anchored CR-1 can act in trans is not well known. Here we confirmed the paracrine activity of CR-1 by fluorescent cell-labeling and immunofluorescent staining. We generated COOH-terminal-truncated soluble forms of CR-1 based on the attachment site for the GPI moiety (-site), which we identified in the present study. GPI-anchored CR-1 has a significantly higher activity than COOH-terminal-truncated soluble forms to induce Nodal signal in trans as well as in cis. Moreover, transmembrane forms of CR-1 partially retained their ability to induce Nodal signaling only when type I receptor Activin-like kinase 4 was overexpressed. NTERA2/D1 cells, which express endogenous CR-1, lost the cell-surface expression of CR-1 after phosphatidylinositol-phospholipase C treatment and became refractory to stimulation of Nodal. These observations suggest that GPI attachment of CR-1 is required for the paracrine activity as a Nodal co-receptor.