Cripto is a glycosylphosphatidylinositol (GPI)-anchored co-receptor of Nodal and several other transforming growth factor-beta (TGF-beta) family ligands. It contains an epidermal growth factor (EGF)-like motif and a Cripto-FRL1-Cryptic (CFC) domain, which are conserved in a family of EGF-CFC proteins. The EGF domain is thought to recruit Nodal, whereas the CFC domain mediates binding to activin receptor-like kinase 4 (ALK4). We found that the EGF-like motif of Cripto was not essential for its binding to Nodal. However, through residues phenylalanine 78 and glycine 71, Cripto enriched Nodal at the limiting membrane of early endosomes. Similarly, residues in the CFC domain that mediate binding of Cripto to ALK4 were required to attenuate sequestration of Nodal in the endosomal lumen. Thus, we propose that Cripto stimulates Nodal activity by localizing it at the interface of endosomes with cytoplasmic effectors. To our knowledge, Cripto is the first GPI-anchored protein shown to control intraendosomal sorting of its associated cargo.