Palmitoylation of cysteine residue 34 within the 67-amino acid cytoplasmic domain of the 46-kDa mannose g-phosphate receptor (MPR 46), which may be anchored to the lipid bilayer, prevents the receptor from entering lysosomes (Schweizer, A., Kornfeld, S., and Rohrer, J, (1996) J, Cell Biol. 132, 577-584). In the present study, we examined the importance of the spacing between the transmembrane domain and the palmitoylation anchor site in the cytoplasmic domain for stability and trafficking of MPR 46. MPR 46 mutants with deletions of residues 20-23 and 24-29 expressed in baby hamster kidney cells were rapidly degraded with half-lives of less than 10 h. The replacement of residues 24-29 by alanine resulted in prolongation of receptor stability (t(1/2) approximate to 20 h). Whereas mutant MPR 46 could not be detected in lysosomal fractions and inhibitors of lysosomal proteases failed to prevent degradation, treatment with the proteasome inhibitor lactacystin resulted in increased stability of mutant MPR 46. Pulse-chase experiments at low temperature and the acquirement of endoglucosaminidase H-resistant oligosaccharides indicate that the majority of mutant MPR 46 is degraded after leaving the Golgi compartment. Altered trafficking of mutant MPR 46 may be the result of decreased palmitoylation reaching 40% of wild type receptors. The data suggest that the spacing between the transmembrane domain and the proposed palmitoylation anchor site in the cytoplasmic domain of MPR 46 is important for a post Golgi sorting step preventing receptor degradation by multiple proteolytic systems including the proteasome.