Deficiency in a recently characterized lysosomal enzyme, palmitoyl-protein thioesterase (PPT), leads to a severe neurodegenerative disorder of children, infantile neuronal ceroid lipofuscinosis (NCL). Over 36 different mutations in the PPT gene have been described, and missense mutations have been interpreted in the light of the recently solved X-ray crystallographic structure of PPT. In the current study, we assessed the biochemical impact of mutations through the study of cells derived from patients and from the expression of recombinant PPT enzymes in COS and Sf9 cells. All missense mutations associated with infantile NCL showed no residual enzyme activity, whereas mutations associated with late-onset phenotypes showed up to 2.15% residual activity. Two mutations increased the K(m) of the enzyme for palmitoylated substrates and were located in positions that would distort the palmitate-binding pocket. An initiator methionine mutation (ATG-->ATA) in two late-onset patients was expressed at a significant level in COS cells, suggesting that the ATA codon may be utilized to a clinically important extent in vivo. The most common PPT nonsense mutation, R151X, was associated with an absence of PPT mRNA. Mannose 6-phosphate modification of wild-type and mutant PPT enzymes was grossly normal at the level of the phosphotransferase reaction. However, mutant PPT enzymes did not bind to mannose 6-phosphate receptors in a blotting assay. This observation was related to the failure of the mutant expressed enzymes to gain access to 'uncovering enzyme' (N-acetylglucosamine-1-phosphodiester alpha-N-acetyl glucosaminidase), presumably due to a block in transit out of the endoplasmic reticulum, where mutant enzymes are degraded.