Peptidylglycine alpha-amidating monooxygenase (PAM) is a bifunctional enzyme responsible for the alpha-amidation of peptides in secretory granules of neuroendocrine cells. The single gene encoding PAM undergoes tissue-specific alternative splicing and endoproteolytic processing to generate bifunctional membrane proteins with a single transmembrane domain as well as soluble proteins that are mono- or bifunctional. In order to examine the endoproteolytic processing and subcellular localization of the various forms of PAM in cells lacking regulated secretory granules, we established stably transfected hEK-293 cell lines expressing naturally occurring and mutant forms of PAM. As expected, newly synthesized soluble PAM proteins were rapidly secreted into the medium. Integral membrane protein forms of PAM were largely localized in the perinuclear region with punctate staining visible throughout the cell and 2-5% of the enzyme activity detectable on the cell surface. Bifunctional PAM proteins were slowly released into the medium after expression of integral membrane protein forms of PAM. Deletion of 77 amino acids from the COOH-terminus of the integral membrane forms of PAM resulted in a membrane-bound protein which retained both enzymatic activities but accumulated on the cell surface. Rapid internalization of full-length PAM proteins was observed by incubating live cells with antiserum to PAM; deletion of the COOH-terminal domain eliminated the ability of cells to internalize PAM. Thus the cytoplasmic domain of integral membrane PAM contains a routing determinant recognized by cells lacking the regulated secretory pathway.