Glucosidase I is an endoplasmic reticulum (ER) type II membrane enzyme that cleaves the distal alpha1,2-glucose of the asparagine-linked GlcNAc2-Man9-Glc3 precursor. To identify sequence motifs responsible for ER localization, we prepared a protein chimera by transferring the cytosolic and transmembrane domain of glucosidase I to the luminal domain of Golgi-Man9-mannosidase. The GIM9 hybrid was overexpressed in COS 1 cells as an ER-resident protein that displayed alpha1,2-mannosidase activity, excluding the possibility that the glucosidase I-specific domains interfere with folding of the Man9-mannosidase catalytic domain. After substitution of the Args in position 7, 8, or 9 relative to the N-terminus by leucine, the GIM9 mutants were transported to the cell surface indicating that the (Arg)3 sequence functions as an ER-targeting motif. Cell surface expression was also observed after substitution of Arg-7 or Arg-8 but not Arg-9 in GIM9 by either lysine or histidine. Thus the side chain structure, including its positive charge, appears to be essential for signal function. Analysis of the N-linked glycans suggests that the (Arg)3 sequence mediates ER localization through Golgi-to-ER retrograde transport. Glucosidase I remained localized in the ER after truncation or mutation of the N-terminal (Arg)3 signal, in contrast to comparable GIM9 mutants. ER localization was also observed with an M9GI chimera consisting of the cytosolic and transmembrane domain of Man9-mannosidase and the glucosidase I catalytic domain. ER-specific targeting information must therefore be provided by sequence motifs contained within the glucosidase I luminal domain. This structural information appears to direct ER localization by retention rather than by retrieval, as concluded from N-linked Man9-GlcNAc2 being the major glycan released from the wild-type enzyme.