Cell exposure to hypo-osmolarity and alkalinity triggers a spectrum of responses including activation of phospholipases. Glycosylphosphatidylinositol-specific phospholipase C (GPI-PLC) is expressed in Trypanosoma brucei, a protozoan parasite that causes human African trypanosomiasis. We examined possible contributions of GPI-PLC to the response of T. brucei to hypo-osmotic or mildly alkaline conditions. GPIs were detected at the endoplasmic reticulum (ER). They were cleaved after exposure of T. brucei to hypo-osmolarity or mild alkalinity, which also, strikingly, caused translocation of GPI-PLC from glycosomes (peroxisomes) to the ER. A catalytically inactive Gln81Leu mutant of GPI-PLC failed to cleave GPIs despite being transported from glycosomes to the ER after hypo-osmotic or mild alkaline treatment of the parasites. In contrast, a Cys347Ser mutant of the enzyme could not exit glycosomes after treatment of cells expressing the protein with mild base or hypo-osmotic buffer. We conclude that: (a) GPI-PLC contributes to loss of GPIs in T. brucei treated with hypo-osmotic or mildly alkaline buffer; (b) access of GPI-PLC to its substrate in vivo can be regulated post-translationally; (c) translocation of GPI-PLC from glycosomes to the ER is important for in vivo cleavage of GPIs; (d) Cys347 is part of a peptide motif required for post-translational targeting of GPI-PLC to the ER. Glycosome-to-ER movement of GPI-PLC reveals a novel pathway for intracellular protein traffic. The physiological significance of GPI digestion in cells exposed to mildly alkalinity or hypo-osmolarity is discussed.