To study the role of the lumenal binding protein (BiP) in the transport and secretion of proteins, we have produced plants with altered Dip levels. Transgenic plants overexpressing Dip showed dramatically increased Dip mRNA levels but only a modest increase in Dip protein levels. The presence of degradation products in Dip overproducers suggests a regulatory mechanism that increases protein turnover when Dip is abundant. Antisense inhibition of BiP synthesis was not successful, demonstrating that even a minor reduction in the basal Dip level is deleterious to cell viability. Overexpression of BiP leads to downregulation of the basal transcript levels of endogenous Dip genes and greatly reduces the unfolded protein response. The data confirm that BiP transcription is regulated via a feedback mechanism that involves monitoring of BiP protein levels. To test BiP activity in vivo, we designed a functional assay, using the secretory protein alpha-amylase and a cytosolic enzyme as a control for cell viability. During tunicamycin treatment, an overall reduction of alpha-amylase synthesis was observed when compared with the cytosolic marker. We show that the tunicamycin effect is due to the depletion of BiP in the endoplasmic reticulum because coexpressed BiP alone is able to restore efficient alpha-amylase synthesis. This is a novel assay to monitor Dip activity in promoting secretory protein synthesis in vivo.