Dystroglycan is a component of the dystrophin glycoprotein complex that is cleaved into two polypeptides by an unidentified protease. To determine the role of post-translational processing on dystroglycan synthesis and trafficking we expressed the dystroglycan precursor and mutants thereof in a heterologous system. A point mutant in the processing site, S655A, prevented proteolytic cleavage but had no effect upon the surface localisation of dystroglycan. Mutation of two N-linked glycosylation sites that flank the cleavage site inhibited proteolytic processing of the precursor. Furthermore, chemical inhibition of N- and O-linked glycosylation interfered with the processing of the precursor and reduced the levels of dystroglycan at the cell surface. Dystroglycan processing was also inhibited by the proteasome inhibitor lactacystin. N-linked glycosylation is a prerequisite for efficient proteolytic processing and cleavage and glycosylation are dispensable for cell surface targeting of dystroglycan.