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Cellular junction formation is an elaborate process that is dependent on the regulated synthesis, assembly and membrane targeting of constituting components. Here, we report on three Drosophila Ly6-like proteins essential for septate junction (SJ) formation. SJs provide a paracellular diffusion barrier and appear molecularly and structurally similar to vertebrate paranodal septate junctions. We show that Crooked (Crok), a small GPI-anchored Ly6-like protein, is required for septa formation and barrier functions. In embryos that lack Crok, SJ components are produced but fail to accumulate at the plasma membrane. Crok is detected in intracellular puncta and acts tissue-autonomously, which suggests that it resides in intracellular vesicles to assist the cell surface localization of SJ components. In addition, we demonstrate that two related Ly6 proteins, Coiled (Cold) and Crimpled (Crim), are required for SJ formation and function in a tissue-autonomous manner, and that Cold also localizes to intracellular vesicles. Specifically, Crok and Cold are required for correct membrane trafficking of Neurexin IV, a central SJ component. The non-redundant requirement for Crok, Cold, Crim and Boudin (Bou; another Ly6 protein that was recently shown to be involved in SJ formation) suggests that members of this conserved family of proteins cooperate in the assembly of SJ components, possibly by promoting core SJ complex formation in intracellular compartments associated with membrane trafficking.

Crooked, Coiled and Crimpled are three Ly6-like proteins required for proper localization of septate junction components