N-benzoyl-L-tyrosyl-p-aminobenzoic acid hydrolase (PPH, human meprin) is a member of the astacin family of Zn-metalloendopeptidases and is highly expressed in the microvillus membrane of human small intestinal epithelial cells. It is a type I transmembrane protein consisting of differentially processed glycosylated alpha and beta subunits. Biosynthesis experiments using transfected, metabolically labelled simian virus 40 (SV40) transformed african green monkey kidney cells (COS-1) and Madin Darby canine kidney (MDCK) cells, have previously shown that PPH alpha was retained in the endoplasmic reticulum (ER) and that for subsequent secretion removal of the alpha-tail was necessary [Grunberg, J., Dumermuth, E., Eldering, J. A. & Sterchi, E. E. (1993) FEBS Lett. 335, 376-379]. We proposed an involvement of the alpha-tail in ER retention. To investigate the possible role of the transmembrane and/or the C-terminal domain of the alpha-subunit, tailswitch mutants were constructed in which these domains were exchanged between the a and beta subunits. Biosynthesis and post-translational processing of these mutants were investigated in transiently transfected COS-1 cells. The beta/alpha tailswitch mutant, in which the transmembrane and C-cytosolic parts of PPH beta were substituted by the corresponding parts of the PPH alpha subunit, was transported much slower compared with the wild-type PPH beta subunit. In addition, fusion of the alpha-tail to a C-terminally truncated secretory form of PPH alpha leads to its retention in the ER. This mutant, but not the secretory form, coimmunoprecipitated with calnexin, indicating an involvement of this molecular chaperone in retaining PPH alpha in the ER. The alpha/beta tailswitch mutant, in which the transmembrane domain and the C-cytosolic part of PPH alpha were substituted by the corresponding parts of PPH beta, was processed less efficiently in comparison with PPH alpha, resulting in a lower secretion rate. Taken together these data suggest a role of the alpha-tail in mediating association with ER-resident machinery, facilitating C-terminal processing.