The posttranslational processing enzyme peptidylglycine alpha-amidating monooxygenase (PAM) occurs naturally in integral membrane and soluble forms. With the goal of understanding the targeting of these proteins to secretory granules, we have compared the maturation, processing, secretion, and storage of PAM proteins in stably transfected AtT-20 cells. Integral membrane and soluble PAM proteins exit the ER and reach the Golgi apparatus with similar kinetics. Biosynthetic labeling experiments demonstrated that soluble PAM proteins were endoproteolytically processed to a greater extent than integral membrane PAM; this processing occurred in the regulated secretory pathway and was blocked by incubation of cells at 20 degrees C. 16 h after a biosynthetic pulse, a larger proportion of soluble PAM proteins remained cell-associated compared with integral membrane PAM, suggesting that soluble PAM proteins were more efficiently targeted to storage granules. The nonstimulated secretion of soluble PAM proteins peaked 1-2 h after a biosynthetic pulse, suggesting that release was from vesicles which bud from immature granules during the maturation process. In contrast, soluble PAM proteins derived through endoproteolytic cleavage of integral membrane PAM were secreted in highest amount during later times of chase. Furthermore, immunoprecipitation of cell surface-associated integral membrane PAM demonstrated that very little integral membrane PAM reached the cell surface during early times of chase. However, when a truncated PAM protein lacking the cytoplasmic tail was expressed in AtT-20 cells, > 50% of the truncated PAM-1 protein reached the cell surface within 3 h. We conclude that the trafficking of integral membrane and soluble secretory granule-associated enzymes differs, and that integral membrane PAM proteins are less efficiently retained in maturing secretory granules.