Abstract Background The signal recognition particle (SRP) receptor plays a vital role in co-translational protein targeting, because it connects the soluble SRP-ribosome-nascent chain complex (SRP-RNCs) to the membrane bound Sec translocon. The eukaryotic SRP receptor (SR) is a heterodimeric protein complex, consisting of two unrelated GTPases. The SRβ subunit is an integral membrane protein, which tethers the SRP-interacting SRα subunit permanently to the endoplasmic reticulum membrane. The prokaryotic SR lacks the SRβ subunit and consists of only the SRα homologue FtsY. Strikingly, although FtsY requires membrane contact for functionality, cell fractionation studies have localized FtsY predominantly to the cytosolic fraction of Escherichia coli. So far, the exact function of the soluble SR in E. coli is unknown, but it has been suggested that, in contrast to eukaryotes, the prokaryotic SR might bind SRP-RNCs already in the cytosol and only then initiates membrane targeting. Results In the current study we have determined the contribution of soluble FtsY to co-translational targeting in vitro and have re-analysed the localization of FtsY in vivo by fluorescence microscopy. Our data show that FtsY can bind to SRP-ribosome nascent chains (RNCs) in the absence of membranes. However, these soluble FtsY-SRP-RNC complexes are not efficiently targeted to the membrane. In contrast, we observed effective targeting of SRP-RNCs to membrane-bond FtsY. These data show that soluble FtsY does not contribute significantly to cotranslational targeting in E. coli. In agreement with this observation, our in vivo analyses of FtsY localization in bacterial cells by fluorescence microscopy revealed that the vast majority of FtsY was localized to the inner membrane and that soluble FtsY constituted only a negligible species in vivo. Conclusion The exact function of the SRP receptor (SR) in bacteria has so far been enigmatic. Our data show that the bacterial SR is almost exclusively membrane-bound in vivo, indicating that the presence of a soluble SR is probably an artefact of cell fractionation. Thus, co-translational targeting in bacteria does not involve the formation of a soluble SR-signal recognition particle (SRP)-ribosome nascent chain (RNC) intermediate but requires membrane contact of FtsY for efficient SRP-RNC recruitment.