Dictyostelium discoideum is a useful system to study the biosynthesis of lysosomal enzymes because of the relative ease with which it can be manipulated genetically and biochemically. Previous studies have revealed that lysosomal enzymes are synthesized in vegetatively growing amoebae as glycosylated precursor polypeptides that are phosphorylated and sulfated on their N-linked oligosaccharide side-chains upon arrival in the Golgi complex. The precursor polypeptides are membrane associated until they are proteolytically processed and deposited as soluble mature enzymes in lysosomes. In this paper we review biochemical experiments designed to determine the roles of post-translational modification, acidic pH compartments, and proteolytic processing in the transport and sorting of lysosomal enzymes. We also describe molecular genetic approaches that are being employed to study the biosynthesis of these enzymes. Mutants altered in the sorting and secretion of lysosomal enzymes are being analyzed biochemically, and we describe recent efforts to clone the genes coding for three lysosomal enzymes in order to better understand the molecular mechanisms involved in the targeting of these enzymes.