Mice born with combined lipase deficiency (cld/cld) have very low lipoprotein (LPL) and hepatic (HL) lipase activities, develop severe hypertriacylglycerolemia, and die within 3 days. The recessive mutation (cld) causing the deficiency is located on chromosome 17, whereas LPL and HL genes are on chromosomes 8 and 11, respectively. Structural genes for the lipases are normal in cld/cld mice. Both lipases are synthesized in parenchymal cells and transferred to endothelial cells where they normally act. The active form of LPL is thought to be a dimer of identical endo H- resistant glycopeptides. Brown adipocytes cultured from cld/cld mice synthesized normal-sized LPL subunits which were glycosylated and partially processed, but the lipase was inactive, retained in ER, and present as aggregates of subunits. The LPL subunits contained endo H-sensitive oligosaccharide chains. LPL was also retained in ER of cultured cld/cld hepatocytes. Blocking glycosylation of LPL with tunicamycin in normal adipocytes resulted in synthesis of LPL which was inactive, retained in ER, ad present as aggregates. Normal processing of oligosaccharide chains is initiated by removal of the outer glucose residue by action of glucosidase I in ER. Blocking glucosidase I with castanospermine (CSTP) in normal adipocytes resulted in production of unprocessed (endo H-sensitive) LPL which was inactive, undimerized, and retained in endoplasmic reticulum (ER). These findings suggested that retention in ER prevented dimerization of LPL subunits. Treatment of cells with brefeldin A, which can redistribute cis and medial Golgi proteins to ER, resulted in formation of active-dimeric LPL in cld/cld and CSTP-treated adipocytes, and formation of inactive-dimeric LPL in tunicamycin-treated cells. The findings indicate that dimerization of LPL subunits requires some component(s) of cis/medial Golgi or the intermediate compartment between ER and Golgi, and that glycosylation and dimerization of LPL subunits are both required for activity of LPL. They also indicate that retention of LPL in ER of cld/cld cells probably results from a direct effect of the cld mutation on transport of LPL from ER to Golgi.