Secretory processing and polarized sorting of horseradish peroxidase fused to the amyloid precursor protein transmembrane domain were compared with those of wild-type amyloid precursor protein in COS and polarized Madin-Darby canine kidney (MDCK) cells. The cellular and secreted forms of the chimeric protein were enzymatically active in colorimetric and cytochemical assays after reconstitution with hemin and Ca2+. The peroxidase enzyme was secreted by a proteolytic process, similar to the parent amyloid precursor protein. In polarized MDCK cells, amyloid precursor protein was secreted exclusively in the basolateral compartment, while the peroxidase chimeric protein was secreted in both compartments. The basolateral sorting determinant for secretion must therefore be located in the extracellular domain of amyloid precursor protein. On the other hand, cell surface-associated peroxidase chimeric protein was similar to cell surface-associated wild-type amyloid precursor protein, mainly expressed at the basolateral side. The basolateral cell-surface expression, in contrast to the basolateral secretion, is therefore controlled by determinants in the cytoplasmic domain. Methylamine inhibited and bafilomycin slightly increased the basolateral secretion of both proteins, but both drugs strongly increased apical secretion. The default secretory pathway of COS cells and the basolateral (but not the apical) secretory pathway of MDCK cells are therefore comparably sensitive to methylamine and not to bafilomycin.