Aggrecan is a complex multidomain macromolecule that undergoes extensive processing and post-translational modification. A thorough understanding of the events and signals that promote translocation of aggrecan through the secretory pathway is lacking. To investigate which features of the C-terminal G3 region are necessary for successful translocation of the core protein, a number of deletion constructs based on the chick aggrecan cDNA sequence were prepared and transiently expressed in COS-1 cells and the natural host, embryonic chick chondrocytes; stable cell lines were established as well. The present results clearly establish a precise requirement for that portion of the G3 C-lectin domain encoded by exon 15 for: (i) translocation from the endoplasmic reticulum (ER) to the Golgi, (ii) secretion from the cell, (iii) galactosylation of chondroitin sulfate (CS) chains, (iv) generation of Ca ؉2 -dependent galactose binding ability. Furthermore, in the absence of this subdomain there is excess accumulation in the ER of expression products leading to a stress-related response involving the chaperones Grp78 and protein disulfide isomerase, followed by degradation via a ubiquitin-proteosome pathway. All of these events in the model system faithfully mimic the naturally occurring nanomelic mutant, which also elicits a ubiquitin-mediated degradation response due to the accumulation of the truncated core protein precursor. This study represents the first report of the mode of degradation of overexpressed or misfolded proteoglycans and suggests that, although proteoglycans follow different glycosylation pathways from other glycoproteins, they are monitored by an ER surveillance system similar to that which detects other misfolded proteins.Aggrecan, the major proteoglycan of the cartilage extracellular matrix, contains two globular domains in the N-terminal portion, G1 and G2, and one C-terminal globular domain, G3. Between the G2 and G3 globular domains, glycosaminoglycan chains (GAGs) 1 are covalently attached to an extended core protein. Functionally, it is well established that the G1 domain is responsible for interaction with hyaluronan in the extracellular matrix. The C-terminal G3 domain has been implicated in synthesis and maturation of aggrecan, because its absence is associated with the avian chondrodystrophy, nanomelia. The nanomelic chick bears a mutation in the aggrecan gene that introduces an early stop codon into the translated sequence, resulting in synthesis of a truncated core protein, which is neither glycosylated nor secreted by chondrocytes (1). The mutant precursor is modified by addition of N-linked oligosaccharides and the chondroitin sulfate chain initiating xylose, but does not acquire mature CS chains, consistent with the conclusion that it progresses no further than the endoplasmic reticulum (ER) in the secretory pathway (2). These studies suggested a previously unrecognized role for the C-terminal globular domain: that it might contain recognition or retention signals or that proper folding o...