In lysosomes beta-galactosidase and neuraminidase acquire a stable and active conformation through their association with the protective protein. The latter is homologous to serine carboxypeptidases and has cathepsin A-like activity which is distinct from its protective function towards the two glycosidases. To define signals in the human protective protein important for its intracellular transport, and to determine the site of its association with beta-galactosidase, we have generated a set of mutated protective protein cDNAs carrying targeted base substitutions. These mutants were either singly transfected into COS-1 cells or cotransfected together with wild type human beta-galactosidase. We show that all point mutations cause either a complete or partial retention of the protective protein precursor in the endoplasmic reticulum. This abnormal accumulation leads to degradation of the mutant proteins probably in this compartment. Only the oligosaccharide chain on the 32-kDa subunit acquires the mannose 6-phosphate recognition marker, the one on the 20-kDa subunit seems to be merely essential for the stability of the mature protein. In cotransfection experiments, wild type beta-galactosidase and protective protein appear to assemble already as precursors, soon after synthesis, in the endoplasmic reticulum. Mutated protective protein precursors that are retained in the endoplasmic reticulum or pre-Golgi complex interact with and withhold normal beta-galactosidase molecules in the same compartments, thereby preventing their normal routing.