Plasma membrane (PM)-targeted fluorescent dyes have become an important tool to visualize morphological and dynamic changes in the cell membrane. However, most of these PM dyes are either too large and thus might potentially perturb the membrane and affect its functions or exhibit a short retention time on the cell membrane. The rapid internalization problem is particularly severe for PM dyes based on cationic and neutral hydrophobic fluorescent dyes, which can be easily transported into the cells by transmembrane potential and passive diffusion mechanisms. In this paper, we report a small but highly specific PM fluorescent dye, PM-1, which exhibits a very long retention time on the plasma membrane with a half-life of approximately 15 h. For biological applications, we demonstrated that PM-1 can be used in combination with protein labeling probes to study ectodomain shedding and endocytosis processes of cell surface proteins and successfully demonstrated that native transmembrane human carbonic anhydrase IX (hCAIX) is degraded via the ectodomain shedding mechanism. In contrast, hCAIX undergoes endocytic degradation in the presence of sheddase inhibitors. We believe that PM-1 can be a versatile tool to provide detailed insights into the dynamic processes of the cell surface proteins.