Murine teratocarcinoma F9 cells, which remain undifferentiated under standard cell culture conditions, can form cellular layers resembling early embryonic tissues upon induction of differentiation by retinoic acid and cyclic AMP. We have employed a combination of Northern and Western blot analyses to elucidate the regulation of expression of the tyrosine kinase substrate annexin II and its cellular ligand p11 during this differentiation process. Interestingly, the synthesis of the two subunits of the annexin II2p112 complex is not coregulated during F9 differentiation. Annexin II, which is only very weakly expressed in undifferentiated F9 cells, shows a strong increase in the amount of transcript and protein once the differentiated phenotype is established. The level of this induction does not depend on the type of F9 differentiation. In contrast to the regulated synthesis of annexin II, a significant amount of p11 mRNA and protein is already present in the undifferentiated cells and remains constant during the differentiation of F9 cells. Immunofluorescence analysis reveals that annexin II and p11 are concentrated in the submembranous region of the differentiated F9 cells. In contrast, p11 is uniformly distributed throughout the cytoplasm of undifferentiated cells. p11 is translocated to the submembranous region of the undifferentiated F9 cells upon coexpression of an exogenous annexin II introduced by transient transfection. Thus the localization of annexin II and p11 to the submembranous cytoskeleton depends on the formation of the tight annexin II2p112 complex.