Report of a human with a homozygous truncating null mutation of the Carboxypeptidase E (CPE) gene with endocrinological and neurological deficits prompted us to search for other mutations in the human CPE gene that might be linked to disease. We searched an EST database and identified from a small population of patients, a novel T to C single nucleotide polymorphism (SNP) in the CPE gene at bp980 of exon 4, herein called TC-CPE. This introduces a tryptophan to arginine (W235R) mutation in the catalytic domain of human CPE protein. Over-expression of TC-CPE in N2A cells, a neuroendocrine cell line, showed that it was synthesized, but was found in lesser amounts compared to over-expressed WT-CPE in these cells. Furthermore, TC-CPE was secreted poorly from these N2A cells. The levels of TC-CPE were significantly increased after the N2A cells were treated with MG132 (a proteasome inhibitor), suggesting that TC-CPE was targeted to proteasomes for degradation in N2A cells. In addition, TC-CPE induced ER stress as demonstrated by the increased expression of CHOP in N2A cells. Double labeling of CPE and calnexin (and ER marker) suggested the accumulation of TC-CPE in the ER, and the accumulation appears to be enhanced by the treatment of MG132 in the cells. Moreover, the secreted levels of TC-CPE were not affected by the treatment of MG132 in the cells. Over-expression studies revealed that while N2A cells transfected with WT-CPE showed reduced cytotoxicity when challenged with H2O2 compared to cells expressing an empty vector, cells transfected with TC-CPE had no effect. Furthermore, WT-CPE condition medium showed protective effect against oxidative stress, but not TC-CPE condition medium. Although co-expression of WT-CPE and TC-CPE in N2A cells resulted in the reduction in secretion of WT-CPE, co-expression of WT-CPE and TC-CPE did not significantly affect the protective effect of WT-CPE. Taken together, we have identified a novel SNP in the CPE gene which results in the loss of its neuroprotective function in cells and may confer neurological disorders in humans.