Glycosylphosphatidylinositols (GPIs) serve as membrane anchors of polysaccharides and proteins in the protozoan parasite Leishmania major. Free GPIs that are not attached to macromolecules are present in L. major as intermediates of protein-GPI and polysaccharide-GPI synthesis or as terminal glycolipids. The importance of the intracellular location of GPIs in vivo for functions of the glycolipids is not appreciated. To examine the roles of intracellular free GPI pools for attachment to polypeptide, a GPI-specific phospholipase C (GPI-PLCp) from Trypanosoma brucei was used to probe trafficking of GPI pools inside L. major. The locations of GPIs were determined, and their catabolism by GPI-PLCp was analyzed with respect to the intracellular location of the enzyme. GPIs accumulated on the endo-lysosomal system, where GPI-PLCp was also detected. A peptide motif [CS][CS]-x(0,2)-G-x(1)-C-x(2,3)-S-x(3)-L formed part of an endosome targeting signal for GPI-PLCp. Mutations of the endosome targeting motif caused GPI-PLCp to associate with glycosomes (peroxisomes). Endosomal GPI-PLCp caused a deficiency of protein-GPI in L. major, whereas glycosomal GPI-PLCp failed to produce the GPI deficiency. We surmise that (i) endo-lysosomal GPIs are important for biogenesis of GPI-anchored proteins in L. major; (ii) sequestration of GPI-PLCp to glycosomes protects free protein-GPIs from cleavage by the phospholipase. In T. brucei, protein-GPIs are concentrated at the endoplasmic reticulum, separated from GPI-PLCp. These observations support a model in which glycosome sequestration of a catabolic GPI-PLCp preserves free protein-GPIs in vivo.