The hepatic asialoglycoprotein receptor (ASGP-R) is an endocytic recycling receptor that mediates the endocytosis of desialylated glycoproteins. The human ASGP-R is composed of two homologous subunits, H1 and H2, and the cytoplasmic Cys residues in both subunits are palmitoylated. To study the effects of palmitoylation on ASGP-R activity and function, we generated four types of stably transfected cell lines in SK-Hep-1 hepatoma cells, expressing wild-type, or partially or completely palmitoylation-defective ASGP-Rs containing Cys-to-Ser mutations in either one or both subunits. Scatchard analysis showed that all four stable cell lines expressed a similar number of binding sites for asialo-orosomucoid, with comparable dissociation constants of approximately 1-3nM. Immunofluorescence confocal microscopy indicated a normal distribution of the palmitoylation-defective H1 and H2 subunits compared to the wild-type. However, cell lines expressing palmitoylation-defective ASGP-Rs had markedly reduced rates of ligand uptake and degradation compared to cells expressing wild-type ASGP-Rs. We conclude that failure to palmitoylate Cys residues in either or both subunits of human ASGP-Rs results in very inefficient uptake and degradation of ligands.