CD24 is a small, heavily glycosylated cell-surface protein which is linked to the membrane via a glycosyl-phosphatidylinositol (GPI-) anchor and therefore localizes in lipid rafts. CD24 is widely used as a cell-lineage marker for hematopoietic cells. CD24 is also expressed on a variety of human carcinomas, including epithelial ovarian, breast, prostate, colon and lung cancer and has been linked to poor prognosis. Except for its role as a ligand for P-selectin on carcinoma and myeloid cells, a specific function for CD24 has not been determined. Here we show that CD24 affects the function of the chemokine receptor CXCR4. Using isolated CD19-positive bone marrow B cells from CD24-knockout mice and CD24-/- pre-B lymphocytic cell lines, we demonstrate that CD24 expression reduces SDF-1-mediated cell migration and signalling via CXCR4. We observed that the loss of CD24 augmented cellular cholesterol levels and enhanced CXCR4 lipid raft association. Altered chemotactic migration and raft residence was also observed in MDA-MB-231 breast cancer cells expressing high and low levels of CD24 and CXCR4 receptor. MDA-MB-231 cells expressing low levels of CD24 also showed enhanced tumour formation in NOD/SCID mice compared with cells overexpressing CD24. These results demonstrate a novel role for CD24 as a regulator of CXCR4 function that could be relevant for breast cancer growth and metastasis.