We have examined the subcellular localization of the neu protein by immunohistochemistry and immuno-electron microscopy, associated with immunoblotting of normal and neoplastic tissues with 2 monoclonal antibodies (MAbs). Immunoelectron microscopy clearly reveals that neu protein resides only on the lateral plasma membrane of the simple epithelium of the breast and on the plasma membrane of malignant breast cells. It is also found on the membranes of the microvilli and the apical vacuoles of the cells of the proximal convoluted tubule of the kidney. In the cytoplasm, the only immunoreactivity detected with both antibodies was on the membrane of the mitochondrial cristae of normal and malignant cells. Immunoblotting reveals that the molecular weight of the membrane protein is I85 and 155 kDa for the mitochondrial protein. The cell membrane staining pattern can be revealed by light microscopic immunohistochemistry only in malignant cells and is therefore specific for malignancy. The membrane expression in normal cells cannot be visualized in this way. The mitochondrial reactivity appears as a cytoplasmic granular staining when examined under the light microscope. Similar cytoplasmic staining has been described previously in other studies with other antibodies against the neu protein and has lead to speculation about its function in normal and malignant cells. However, it is demonstrated in this study that it is not the known neu-oncogene product.