The neprilysin (NEP)/endothelin-converting enzyme (ECE) family of metalloproteases contains a highly conserved carboxyl-terminal tetrapeptide sequence, CXAW, where "C" is cysteine, "X" is a polar amino acid, "A" is an aliphatic residue, and "W" is tryptophan. Although this sequence strongly resembles a prenylation motif, human ECE-1 did not appear to be prenylated when labeled in vivo using various isoprenoid precursors in cell lines expressing ECE-1. We used site-directed mutagenesis to investigate the role of the CXAW motif and determined that the conserved cysteine residue of the CXAW motif in ECE-1, Cys(755), is critical for proper folding of the enzyme, its export from the endoplasmic reticulum, and its maturation in the secretory pathway. In addition, site-directed mutagenesis revealed that the conserved tryptophan residue of the sequence CEVW appears to be important for endoplasmic reticulum export and is essential for enzyme activity. Deletion of Trp(758) or substitution with alanine greatly slowed maturation of the enzyme, and resulted in more than a 90% loss of enzyme activity relative to the wild type. Conservative substitution of the tryptophan with phenylalanine did not reduce activity, whereas replacement with tyrosine, methionine, or leucine reduced enzyme activity by 50%, 75%, and 85%, respectively. Together, these data indicate that the conserved CEVW sequence does not serve as a prenylation signal and that both the conserved cysteine and tryptophan residues are necessary for proper folding and maturation of the enzyme. Furthermore, the conserved tryptophan appears to be critical for enzyme activity.