gamma-Glutamyltranspeptidase (gammaGT) is found primarily on the apical surface of epithelial and endothelial cells, where it degrades reduced and oxidized glutathione (gamma-GluCysGly) by hydrolysis of the unique gamma-glutamyl bond. Glutathione plays a key role in disulfide rearrangement in the endoplasmic reticulum (ER) and acts as a redox buffer. Previous work has shown that overexpression of gammaGT or an inactive splice variant gammaGTDelta7 mediates a redox stress response in the endoplasmic reticulum (ER) characterized by increased levels of BiP and induction of CHOP-10. To determine whether a CX(3)C motif might be the common feature of gammaGT and gammaGTDelta7 that mediates this response, we characterized disulfide bridges in gammaGT that might form between the six highly conserved Cys residues. Using site-directed mutagenesis of gammaGT, expression in Chinese Hamster Ovary (CHO) cells, metabolic labeling, and immunoblotting, our data predict disulfide formation between Cys49 and Cys73 and between Cys191 and Cys195 (the CX(3)C motif). Potential functions for this CX(3)C motif are discussed. In the course of defining the disulfides, we also noted that propeptide cleavage correlated with enzymatic activity. Because recent reports indicate that the homologous Escherichia coli gammaGT is a member of the N-terminal nucleophile (Ntn) hydrolase family, where the amino acid at the new N-terminus functions as the nucleophile for both autocatalytic cleavage and enzymatic activity, the rat gammaGT was similarly characterized. As predicted, mutations at the propeptide cleavage site coincidentally inhibit both heterodimer formation and gammaGT enzymatic activity. Analysis of early cleavage events using cell extraction into SDS indicates that propeptide cleavage occurs while gammaGT is still within the ER. Because activation and cleavage are coincident events, this raises the new question of whether an active glutathionase is present within the ER and what role gammaGT plays in modulating ER glutathione levels that are so critical for proper redox balance and disulfide formation in this compartment.