Chinese hamster ovary cells were transfected with a recombinant DNA containing the entire coding sequence of human lysosomal protective protein cDNA under the control of mouse metallothionein I promoter. Neomycin and methotrexate-resistant stably transformed cell lines expressing this protein were isolated. Immunoprecipitation of the product with antiserum against human placental protective protein-beta-galactosidase complex revealed a 52-kDa protective protein precursor, which was then processed to mature form, a heterodimer of 32- and 20-kDa polypeptides. The precursor secreted in the culture medium was taken up by the mannose 6-phosphate receptor system and restored acid carboxypeptidase, beta-galactosidase, and neuraminidase activities in galactosialidosis fibroblasts. The expressed protein showed a granular pattern in intracellular distribution, was fractionated at the density of lysosomes, and had serine esterase activities; acid carboxypeptidase at pH 5.6, esterase at pH 7.0, and carboxyl-terminal deamidase at pH 7.0. They were inhibited simultaneously by phenylmethylsulfonyl fluoride, N-benzyloxycarbonyl-L-phenylalanine chloromethyl ketone, or iodoacetamide. The acid carboxypeptidase activity of the purified monomeric mature protective protein was labile in vitro under the acidic condition. Saposins (sphingolipid activator proteins) stabilized the activity at micromolar level concentrations.