In order to define the functional importance of the conserved RRGDL motif in the P-domain of the mammalian proprotein convertases(PCs) we generated and cellularly expressed three mutant PC1 vaccinia-virus (VV) recombinants: ARGDL-PC1, RAGDL-PC1 and RRGEL-PC1. Functionally, these mutants caused a decreased level of processing of pro-opiomelanocortin (POMC) into beta-lipotropic pituitary hormone (beta-LPH), especially in the constitutively secreting BSC40 cells. Pulse-chase analyses demonstrated that, in part, this effect was due to both an increased degradation of the mutant PC1s within the endoplasmic reticulum and to a diminished level of zymogen processing in the same compartment. In addition, within cells containing secretory granules such as PC12 and GH4C1 cells, such mutations prevented the C-terminal auto-processing of PC1 into the fully mature 66 kDa form stored in the secretory granules of regulated cells. Since the 66 kDa PC1 is the most active form of the enzyme, it is proposed that the RRGDL sequence is critical for the generation of maximal intracellular PC1 activity. In regulated cells, co-expression of POMC with PC1 or its mutants together with the general PC inhibitor alpha1-antitrypsin Portland (alpha1-PDX), which acts primarily within the constitutive secretory pathway, demonstrated that the latter completely inhibited the formation of beta-LPH by PC1 mutants, whereas it only partially inhibited the ability of wild-type PC1 to process POMC. This suggests that RRGDL mutations prevent PC1 from entering secretory granules and hence the formation of the 66 kDa PC1, and result in the mis-sorting of PC1 mutants towards the constitutive secretory pathway. This conclusion was further supported by immunocytochemical data demonstrating that RRGDL mutants exhibit an intracellular localization pattern different from that of the granule-associated wild-type PC1,but similar to that of the Golgi-localized convertase PC5-B.