ABCG2 is an ATP-binding cassette half-transporter important in normal tissue protection, drug distribution, and excretion. ABCG2 requires homodimerization for function, though the mechanism for dimerization has not been elucidated. We conducted mutational analysis of threonine 402, three residues from the GXXXG motif in TM1, to study its potential role in ABCG2 dimerization (TXXXGXXXG). Single mutations to leucine (T402L) or arginine (T402R) did not have a significant impact on the ABCG2 protein. On the other hand, combining the T402 mutations with the GXXXG glycine to leucine mutations (T402L/G406L/G410L and T402R/G406L/G410L) resulted in a substantially reduced level of expression, altered glycosylation, degradation by a proteosome-independent pathway, and partial retention in the endoplasmic reticulum as suggested by immunostaining, Endo H sensitivity, and MG132 and bafilomycin failed effect. The T402L/G406L/G410L mutant when incubated with the ABCG2 substrate MX showed a shift on immunoblot analysis to the band representing the fully mature glycoprotein. The T402R/G406L/G410L mutant carrying the more drastic substitution was found to primarily localize intracellularly. The same set of mutations also displayed impaired dimerization in the TOXCAT assay for TM1 compared to that of the wild type. Homology modeling of ABCG2 places the TXXXGXXXG motif at the dimer interface. These studies are consistent with a role for the extended TXXXGXXXG motif in ABCG2 folding, processing, and/or dimerization.