Fatty acid desaturases (FADs) play a prominent role in plant lipid metabolism and are located in various subcellular compartments, including the endoplasmic reticulum (ER). To investigate the biogenesis of ER-localized membrane-bound FADs, we characterized the mechanisms responsible for insertion of Arabidopsis FAD2 and Brassica FAD3 into ER membranes and determined the molecular signals that maintain their ER residency. Using in vitro transcription/translation reactions with ER-derived microsomes, we show that both FAD2 and FAD3 are efficiently integrated into membranes by a co-translational, translocon-mediated pathway. We also demonstrate that while the C-terminus of FAD3 (-KSKIN) contains a functional prototypic dilysine ER retrieval motif, FAD2 contains a novel C-terminal aromatic amino acid-containing sequence (-YNNKL) that is both necessary and sufficient for maintaining localization in the ER. Co-expression of a membrane-bound reporter protein containing the FAD2 C-terminus with a dominant-negative mutant of ADP-ribosylation factor (Arf)1 abolished transient localization of the reporter protein in the Golgi, indicating that the FAD2 peptide signal acts as an ER retrieval motif. Mutational analysis of the FAD2 ER retrieval signal revealed a sequence-specific motif consisting of Phi-X-X-K/R/D/E-Phi-COOH, where -Phi- are large hydrophobic amino acid residues. Interestingly, this aromatic motif was present in a variety of other known and putative ER membrane proteins, including cytochrome P450 and the peroxisomal biogenesis factor Pex10p. Taken together, these data describe the insertion and retrieval mechanisms of FADs and define a new ER localization signal in plants that is responsible for the retrieval of escaped membrane proteins back to the ER.