Lysosomal acid lipase (LAL; EC 3.1.1.13) hydrolyzes intracellular triglycerides and cholesterol esters taken up by various cell-types. Previously, LAL purified from human liver tissue was described as a preproprotein with a 27 amino acid signal peptide and a 49 amino acid propeptide. Three mutants of the putative proregion of LAL were produced and expressed in Spodoptera frugiperda insect cells. Pulse-chase experiments demonstrated that LAL undergoes proteolytical processing. The deletion of the 49 amino acids led to a complete loss of the LAL activity. The two other mutants were produced at the C-terminus of the pro-region, at positions 49 and 50, by site-directed mutagenesis. Mutant K49R showed wild-type LAL activity, but mutant G50A showed significantly reduced enzyme activity compared to wild-type LAL and a greater reduction in culture medium than in detergent cell extracts. Kinetic data suggest that mutant G50A is less stable than wild-type LAL and mutant K49R. In contrast to K49, the highly conserved amino acid residue G50 seems to be in a very important position and its mutation influences both secretion and enzyme activity of LAL. A three-dimensional model of LAL shows that K49 and G50 are localized in the loop-region between two beta-sheets, highly accessible for proteolytic enzymes. These data together indicate that LAL is indeed a preproprotein, in which the pro-region is essential for its folding and stability, secretion, and enzyme activity.