The biosynthesis of C1 Inh (C1 inhibitor) was studied in a human hepatoma cell line (Hep G2) by metabolic labelling, immunoprecipitation with anti-(C1 Inh) serum, analysis on SDS/polyacrylamide gel slabs and fluorography. Two forms of C1 Inh are secreted by Hep G2: a minor form of Mr 90,000 and a major form of Mr approximately 100,000. The latter form is also found in small amounts intracellularly in co-existence with an 80,000-Mr form. Accumulation of the 80,000-Mr C1 Inh is favoured when the cells are labelled at 23 degrees C instead of 37 degrees C or when they are treated with monensin. In the presence of tunicamycin, a compound that blocks the formation of N-asparagine-linked oligosaccharide chains, a decrease in Mr of both secreted and intracellular major forms is observed, indicating that secreted and intracellular C1 Inh contain N-linked oligosaccharide units. The 100,000 Mr secreted C1 Inh is sensitive to endoglycosidase F but resistant to endoglycosidase H, and it incorporates [3H]galactose, [3H]glucosamine and [3H]galactosamine, indicating the presence of both N-linked oligosaccharides of the complex type and O-linked oligosaccharides. The intracellular C1 Inh contains N-linked oligosaccharide units of the high-mannose type as demonstrated by endoglycosidase H-sensitivity. The functional activity of C1 Inh during its biosynthesis was tested by studying its reactivity towards C1s. Both secreted and intracellular C1 Inh form covalent-like complexes with purified plasma C1s. The underglycosylated C1 Inh secreted in presence of tunicamycin is still reactive with purified C1s. These results clearly show that sugars are not essential for this inhibitory activity of C1 Inh.