N-Benzoyl-L-tyrosyl-p-aminobenzoic acid hydrolase (PPH, human meprin), is a peptidase found in the microvillus membrane of human small intestinal epithelial cells. PPH belongs to the astacin family of zinc-metalloendopeptidases and is a protein complex composed of two glycosylated subunits, alpha and beta. The present report describes the cloning of the complete beta subunit and the remaining N2-terminal end of the alpha subunit for analysis of their primary structures in addition to the examination of their biogenesis in transfected cell cultures. The complete open reading frame of the PPH beta cDNA translates into 700 amino acid residues compared with 746 residues for the PPH alpha cDNA. The primary structure of beta and alpha subunits are 44% identical and 61% similar. As predicted from their primary structure, the two subunits of PPH have identical modular structures; starting at the N2-terminus both contain a signal peptide, a propeptide, a protease domain containing the astacin signature, a meprin A5 protein tyrosine phospatase mu (MAM) and a meprin and TRAF homology domain (MATH) domain, an epidermal growth factor(EGF)-like domain, a putative transmembrane anchor domain and a short cytosolic tail. Pulse/chase labelling and immuno-Gold electronmicroscopy of recombinant PPH beta and alpha subunits expressed in transfected Madin-Darby canine kidney (MDCK) cells show that post-translational processing and transport of the two subunits are very different. When expressed alone, the beta subunit acquired complex glycan residues, readily formed homodimers and was transported to the plasma membrane. Small amounts of PPH beta were found in the culture medium. In contrast, the cell-bound alpha subunit, when expressed alone, remained primarily in the high-mannose form, was aggregated and not expressed at the cell surface. However, the bulk of mostly endo-beta-N-acetylglucosaminidase H-resistant alpha subunit was found in the filtered culture medium. The proteolytic event that leads to the formation of this soluble transport-competent form occurs in the endoplasmic reticulum (ER). Coexpression of the alpha subunit with the beta subunit allowed the localisation of the alpha subunit to the plasma membrane. These studies indicate that assembly of the two subunits of PPH is required for the localisation of the alpha subunit to the plasma membrane. In contrast to rodent meprin, both PPH subunits are apically secreted from MDCK cells.