Type I transglutaminase (TG1) is an enzyme that is responsible for assembly of the keratinocyte cornified envelope. Although TG1 mutation is an underlying cause of autosomal recessive congenital ichthyosis, a debilitating skin disease, the pathogenic mechanism is not completely understood. In the present study we show that TG1 is an endoplasmic reticulum (ER) membrane-associated protein that is trafficked through the ER for ultimate delivery to the plasma membrane. Mutation severely attenuates this processing and a catalytically inactive point mutant, TG1-FLAG(C377A), accumulates in the endoplasmic reticulum and in aggresome-like structures where it is ubiquitinylated. This accumulation results from protein misfolding, as treatment with a chemical chaperone permits it to exit the endoplasmic reticulum and travel to the plasma membrane. ER accumulation is also observed for ichthyosis-associated TG1 mutants. Our findings suggest that misfolding of TG1 mutants leads to ubiquitinylation and accumulation in the ER and aggresomes, and that abnormal intracellular processing of TG1 mutants may be an underlying cause of ichthyosis.Transglutaminases comprise a family of multifunctional proteins that play an important role in protein stabilization and intracellular signaling (1, 2). The consensus view is that epidermal type I transglutaminase (TG1), 2 which is expressed in surface epithelia, has an important and essential role in catalyzing protein-protein cross-link formation leading to formation of the cornified envelope (3-8). The cornified envelope is a 15-nm thick structure comprised of covalently cross-linked proteins and lipids deposited adjacent to the inner surface of the plasma membrane in differentiating keratinocytes (7,(9)(10)(11)(12)(13)(14)(15)(16). It is assembled from soluble (e.g. involucrin and small prolinerich proteins) and non-soluble (e.g. loricrin, periplakin, and envoplakin) proteins (17,18). TG1 catalyzes the formation of protein-protein bonds in which the amine acceptor is provided by the ⑀-amino group of a protein-bound lysine and the ultimate link is a N 6 -(␥-glutamyl)lysine isopeptide bond (19,20). The cornified envelope is an essential component of the epidermal barrier. Indeed a key role for TG1 in barrier assembly is indicated by impaired barrier function in Tgm1 knock-out mice (21). TG1 function is also required for normal epidermal function in humans. TG1 mutations are present in 50% of autosomal recessive congenital ichthyosis patients. Autosomal recessive congenital ichthyosis is a debilitating skin disease characterized by scaly epidermis and reduced barrier function. Over 90 different mutations of the Tgm1 gene have been identified in these patients (22). Many of these mutations are deletion or point mutations within the catalytic domain, but disease-associated mutations are also located in other segments of the TG1 protein that do not include residues that are directly required for activity (22, 23). These mutations are associated with reduced TG1 level and activity in tissue and cu...