We report the identification and initial characterization of paralemmin, a putative new morphoregulatory protein associated with the plasma membrane. Paralemmin is highly expressed in the brain but also less abundantly in many other tissues and cell types. cDNAs from chicken, human, and mouse predict acidic proteins of 42 kD that display a pattern of sequence cassettes with high inter-species conservation separated by poorly conserved linker sequences. Prenylation and palmitoylation of a COOH-terminal cluster of three cysteine residues confers hydrophobicity and membrane association to paralemmin. Paralemmin is also phosphorylated, and its mRNA is differentially spliced in a tissue-specific and developmentally regulated manner. Differential splicing, lipidation, and phosphorylation contribute to electrophoretic heterogeneity that results in an array of multiple bands on Western blots, most notably in brain. Paralemmin is associated with the cytoplasmic face of the plasma membranes of postsynaptic specializations, axonal and dendritic processes and perikarya, and also appears to be associated with an intracellular vesicle pool. It does not line the neuronal plasmalemma continuously but in clusters and patches. Its molecular and morphological properties are reminiscent of GAP-43, CAP-23, and MARCKS, proteins implicated in plasma membrane dynamics. Overexpression in several cell lines shows that paralemmin concentrates at sites of plasma membrane activity such as filopodia and microspikes, and induces cell expansion and process formation. The lipidation motif is essential for this morphogenic activity. We propose a function for paralemmin in the control of cell shape, e.g., through an involvement in membrane flow or in membrane-cytoskeleton interaction.