A mutant of human gamma-glutamyl transpeptidase (EC 2.3.2.2, a membrane-bound enzyme of importance in glutathione metabolism) that differs from the wild type by deletion of the putative signal peptide/anchor domain (amino acid residues 1-27) was expressed in insect cells using a baculovirus system. In contrast to the wild-type enzyme--which, as expected, was mainly cell-associated--the mutant enzyme was secreted into the medium. The mutant and wild-type enzymes were purified and found to exhibit virtually identical catalytic properties. The mutant enzyme was glycosylated and processed into two subunits, as found for the wild-type enzyme. Brefeldin A inhibited secretion of the mutant enzyme and led to its accumulation in cells. The findings indicate that gamma-glutamyl transpeptidase can be targeted to the endoplasmic reticulum in a manner that does not involve function of an amino-terminal "signal/anchor" domain and that this domain is involved primarily in a membrane anchoring function. Another region of the enzyme may function as a signal domain.