The amiloride-sensitive Na+ channel constitutes the rate-limiting step for Na+ transport in epithelia. Immunolocalization and electrophysiological studies have demonstrated that this channel is localized at the apical membrane of polarized epithelial cells. This localization is essential for proper channel function in Na+ transporting epithelia. In addition, the channel has been shown to associate with the cytoskeletal proteins ankyrin and alpha-spectrin in renal epithelia. However, the molecular mechanisms underlying the cytoskeletal interactions and apical membrane localization of this channel are largely unknown. In this study we show that the putative pore forming subunit of the rat epithelial (amiloride-sensitive) Na+ channel (alpha ENaC) binds to alpha-spectrin in vivo, as determined by co-immunoprecipitation. This binding is mediated by the SH3 domain of alpha-spectrin which binds to a unique proline-rich sequence within the C-terminal region of alpha rENaC. Accordingly, the C-terminal region is sufficient to mediate binding to intact alpha-spectrin from alveolar epithelial cell lysate. When microinjected into the cytoplasm of polarized primary rat alveolar epithelial cells, a recombinant fusion protein containing the C-terminal proline-rich region of alpha rENaC localized exclusively to the apical area of the plasma membrane, as determined by confocal microscopy. This localization paralleled that of alpha-spectrin. In contrast, microinjected fusion protein containing the N-terminal (control) protein of alpha rENaC remained diffuse within the cytoplasm. These results suggest that an SH3 binding region in alpha rENaC mediates the apical localization of the Na+ channel. Thus, cytoskeletal interactions via SH3 domains may provide a novel mechanism for retaining proteins in specific membranes of polarized epithelial cells.