Angiotensin-converting enzyme (ACE) is an extensively glycosylated type I ectoprotein anchored in the plasma membrane by a hydrophobic transmembrane domain. In tissue culture as well as in vivo, the extracellular domain of ACE is released into the culture medium by a regulated proteolytic cleavage. To identify the cellular proteins that regulate ACE processing and cleavage-secretion, ACE-bound proteins were purified by affinity chromatography and characterized by microsequencing and Western blotting. One protein was identified as ribophorin and another as immunoglobulin-binding protein (BiP), a chaperone. Metabolic labeling and immunoprecipitation of ACE confirmed its interaction with BiP. Overexpression of BiP inhibited ACE secretion, an effect accentuated by the expression of an enzymatically inactive mutant BiP, This inhibition was caused by the retention of ACE precursors by BiP in the endoplasmic reticulum, as revealed by immunoprecipitation and immunofluorescence experiments. However, treatment with a phorbol ester, phorbol 12-myristate 13-acetate, enhanced ACE secretion even from cells overexpressing BiP. Western blot analysis of ACE-associated proteins with antibodies to protein kinase C (PRC) revealed the presence of its specific isozymes. Treatment with phorbol 12-myristate 13-acetate caused marked reduction in ACE association of selective PKC species. Thus, our studies have identified PKC and BiP as two proteins that directly interact with ACE and modulate its cell-surface expression and cleavage secretion.