The nucleotide binding domains (NBDs) within CFTR were initially predicted to lie in the cell cytoplasm, and to gate anion permeability through a pore that was present in membrane spanning alpha helices of the overall polypeptide. Our studies designed to characterize CFTR suggest several important features of the isolated nucleotide binding domain. NBD-1 appears to bind nucleotides with similar affinity to the full-length CFTR protein. In solution, the domain contains a high beta sheet content and self-associates into ordered polymers with molecular mass greater than 300,000 Daltons. The domain is very lipophilic, disrupts liposomes, and readily enters the planar lipid bilayer. Clinically important mutations in the domain may disrupt the nucleotide binding capabilities of the protein, either through a direct effect on the nucleotide binding site, or through effects that influence the overall folding of the domain in vitro. Finally, after expression in human epithelial cells (including epithelial cells from a CF patient), the first nucleotide binding domain targets the plasma membrane even in the absence of other constituents of full-length CFTR and mediates anion permeability in these cells.