Most cases of cystic fibrosis are caused by a single deletion mutation (deltaF508) within the first nucleotide binding fold (NBF1) of the CFTR protein (cystic fibrosis transmembrane conductance regulator). NBF1 is classically defined as amino acid residues phenylalanine 433 through serine 589, encoded by exons 10-12, and only part of exon 9, of the CFTR gene. This assignment is based on sequence homology of this region of the CFTR protein with that of other nucleotide binding proteins. Here, we report that when the complete modular unit encoded precisely by exons 9-12 is expressed in Escherichia coli as glycine 404 through serine 589, i.e., as [G404-N432]NBF1 or as deltaF508[G404-N432]NBF1, the resultant proteins target the cytoplasmic membrane. Significantly, [G404-N432]NBF1 is readily labeled from the outside of intact E. coli spheroplasts with the water soluble, membrane impermeable probe Biotin-X-NHS, sulfosuccinimidyl-6-(biotinamido)-hexanoate. Similar findings were observed with the disease causing mutant deltaF508[G404-N432]NBF1. Three different control experiments which involved (1) assays for known cytosolic E. coli enzymes, (2) immuno-gold electron microscopy with antibody having an epitope for the biotin moiety, and (3) tests for biotinylation of the cytosolic component, Enzyme 1 of the glucose phosphotransferase system, demonstrated that the spheroplasts used in this study are neither leaky nor permeable to Biotin-X-NHS. In addition, membrane-associated [G404-N432]NBF1, upon solubilization with Triton X-100, was found to bind to an ATP-agarose column and be released therefrom by elution with ATP, emphasizing retention of a native-like structure. In sharp contrast, NBF1 localizes to the cytosol when the [G404-N432]-N-terminal region is replaced with the maltose binding protein. The novel findings reported here implicate a role of the N-terminal region of NBF1 in its subcellular localization and are directly relevant to our understanding of the membrane structure, function, and trafficking of CFTR.