A novel point mutation in the lysosomal acid sphingomyelinase gene has been identified in the recently reported Serbian family with a clinically and biochemically atypical intermediate form of Niemann-Pick disease. The mutation was a T1171-->G transversion resulting in substitution of glycine for normal tryptophan at amino acid residue 391. The coding sequence was otherwise normal. All of the five affected individuals were almost certainly homoallelic, and both of the two obligate heterozygotes studied also carried the same mutation. This mutation is therefore likely to be directly associated with the atypical phenotype of these patients. Expression in COS-1 cells suggested a higher residual activity than that in cultured fibroblasts. A recently developed high-affinity rabbit antihuman sphingomyelinase antibody allowed us to study for the first time the biosynthesis, processing, and targeting of a mutant sphingomyelinase by metabolic labeling of cultured fibroblasts. The mutant enzyme protein was normally synthesized, processed, and routed to the lysosome but was apparently unstable and degraded rapidly once it reached the lysosome. Together with the finding of the relatively high residual activity in COS-1 cells, we interpret our observations to mean that instability and rapid breakdown of the mature mutant enzyme protein, due to the mutation rather than direct inactivation of the catalytic activity, is the primary mechanism for the deficiency of sphingomyelinase activity in these patients. A high prevalence of this mutation in the Serbian population is likely, since the family pedigree indicates that members from four reportedly unrelated families must have contributed the same mutation.