Furin is a membrane-associated endoprotease that efficiently cleaves precursor proteins on the C-terminal side of the consensus sequence, Arg-X-Lys/Arg-Arg1, and has been proposed to catalyze these reactions in both exocytic and endocytic compartments. To study its biosynthesis and routing, a furin construct (designated fur/f) containing the FLAG epitope tag inserted on the C-terminal side of the enzyme's autoproteolytic maturation site was used. Introduction of the epitope tag had no effect on the expression, proteolytic maturation or activity of furin. Analysis of the localization of fur/f by immunofluorescence microscopy showed that its staining pattern largely overlapped with those of several Golgi-associated markers. Treatment of cells with brefeldin A caused the fur/f distribution to collapse around the microtubule organizing center, indicating that furin is concentrated in the trans-Golgi network (TGN). Immunoelectron microscopy showed unequivocally that furin resides in the TGN where it colocalized with TGN38. In agreement with its proposed activity in multiple compartments, antibody uptake studies showed that fur/f cycles between the cell surface and TGN. Furthermore, targeting to the TGN requires sequences in the cytoplasmic tail of the enzyme. Pulse-chase and immunofluorescence analyses demonstrated that proregion removal occurs in the endoplasmic reticulum and that cleavage may be required for exist from this compartment. Finally, we show that proregion removal is necessary but not sufficient for enzyme activation.