Amyloid beta-peptide is generated by two sequential proteolytic cleavages mediated by beta-secretase (BACE) and gamma-secretase. BACE was recently identified as a membrane-associated aspartyl protease. We have now analyzed the maturation and pro-peptide cleavage of BACE. Pulse-chase experiments revealed that BACE is post-translationally modified during transport to the cell surface, which can be monitored by a significant increase in the molecular mass. The increase in molecular mass is caused by complex N-glycosylation. Treatment with tunicamycin and N-glycosidase F led to a BACE derivative with a molecular weight corresponding to an unmodified version. In contrast, the mature form of BACE was resistant to endoglycosidase H treatment. The cytoplasmic tail of BACE was required for efficient maturation and trafficking through the Golgi; a BACE variant lacking the cytoplasmic tail undergoes inefficient maturation. In contrast a soluble BACE variant that does not contain a membrane anchor matured more rapidly than full-length BACE. Pro-BACE was predominantly located within the endoplasmic reticulum. Pro-peptide cleavage occurred immediately before full maturation and trafficking through the Golgi.