The processing of tyrosinase, which catalyzes the limiting reaction in melanin synthesis, was investigated in melan-p1 melanocytes, which are null at the p locus. Endoglycosidase H digestion showed that a significant fraction of tyrosinase was retained in the endoplasmic reticulum. This retention could be rescued either by transfection of melan-p1 cells with an epitope-tagged wild-typep transcript or by treatment with either bafilomycin A1 or ammonium chloride. We found that the endoplasmic reticulum contains a significant amount of p protein, thus supporting a role for p within this compartment. Using immunofluoresence, we showed that most mature full-length tyrosinase in melan-p1 cells was located in the perinuclear area near the Golgi, in contrast to its punctate melanosomal pattern in wild-type melanocytes. Expression of p in melan-p1 cells restored tyrosinase to melanosomes. Triton X-114 phase separation revealed that an increased amount of tyrosinase was proteolyzed in melan-p1 cells compared with wild-type melanocytes. The proteolyzed tyrosinase was no longer membrane bound, but remained enzymatically active and a large proportion was secreted into the culture medium of melan-p1 cells. We conclude that p regulates posttranslational processing of tyrosinase, and hypopigmentation in melan-p1 cells is the result of altered tyrosinase processing and trafficking.