Prosaposin is synthesized as a 53-kDa protein, post-translationally modified to a 65-kDa form and further glycosylated to a 70-kDa secretory product. The 65-kDa protein is associated to Golgi membranes and is targeted to lysosomes, where four smaller nonenzymatic saposins implicated in the hydrolysis of sphingolipids are generated by its partial proteolysis. The targeting of the 65-kDa protein to lysosomes is not mediated by the mannose 6-phosphate receptor. The Golgi apparatus appears to accomplish the molecular sorting of the 65-kDa prosaposin by decoding a signal from its amino acid backbone. This investigation deals with the characterization of the sequence involved in this process by deleting the saposin functional domains A, B, C, and D and the highly conserved N and C termini of prosaposin. The truncated cDNAs were subcloned into expression vectors and transfected to COS-7 cells. The destination of the mutated proteins was assessed by immunocytochemistry. Deletion of the C terminus did not interfere with the secretion of prosaposin but abolished its transport to lysosomes. Deletion of saposins and the N-terminal domain did not affect the lysosomal or secretory routing of prosaposin. A chimeric construct of albumin and the C terminus of prosaposin was not directed to lysosomes. However, albumin connected to the C terminus and one or more functional domains of prosaposin reached lysosomes, indicating that the C terminus and at least one saposin domain are required for this process. In summary, we are reporting a novel sequence involved in the targeting of prosaposin to lysosomes.