The endoplasmic reticulum-localized enzyme alpha-glucosidase II is responsible for removing the two alpha-1,3-linked glucose residues from N-linked oligosaccharides of glycoproteins. This activity is missing in the modA mutant strain, M31, of Dictyostelium discoideum. Results from both radiolabeled pulse-chase and subcellular fractionation experiments indicate that this deficiency did not prevent intracellular transport and proteolytic processing of the lysosomal enzymes, alpha-mannosidase and beta-glucosidase. However, the rate at which the glucosylated precursors left the rough endoplasmic reticulum was several-fold slower than the rate at which the wild-type precursors left this compartment. Retention of glucose residues did not disrupt the binding of the precursor forms of the enzymes with intracellular membranes, indicating that the delay in movement of proteins from the ER did not result from lack of association with membranes. However, the mutant alpha-mannosidase precursor contained more trypsin-sensitive sites than did the wild-type precursor, suggesting that improper folding of precursor molecules might account for the slow rate of transport to the Golgi complex. Percoll density gradient fractionation of extracts prepared from M31 cells indicated that the proteolytically processed mature forms of alpha-mannosidase and beta-glucosidase were localized to lysosomes. Finally, the mutation in M31 may have other, more dramatic, effects on the lysosomal system since two enzymes, N-acetylglucosaminidase and acid phosphatase, were secreted much less efficiently from lysosomal compartments by the mutant strain.