The neuroendocrine granule-associated protein 7B2, unlike many other neuroendocrine precursor proteins stored in secretory granules, carries in its primary structure the Arg-Xaa-Arg/Lys-Arg processing site usually found in constitutively secreted precursor proteins and recognized by the ubiquitously expressed convertase, furin. pro7B2 (30 kDa), when expressed in endocrine (AtT-20, PC12, and GH4C1) or non-endocrine (Ltk-) cell lines using recombinant vaccinia viruses, was converted to a 23-kDa form. Mutation of the P4 Arg to Gly completely prevented this conversion. When excess pro7B2 was coexpressed with the pro-protein convertases PC1, PC2, or furin, only furin could induce complete processing. In addition, coexpression of pro7B2 in LoVo cells, which are devoid of endogenous furin activity, with each one of the three convertases, showed that only furin was able to induce processing of this precursor. pro7B2 processing in AtT-20 was completely abolished when protein transport into Golgi compartments was blocked by cell incubation at either 15 or 37 degrees C in the presence of monensin or brefeldin A. Furthermore, pulse-chase experiments in the presence of Na2[35S]SO4 showed that pro7B2 is Tyr-sulfated in the trans-Golgi network before it is processed. These results demonstrate that pro7B2 is first processed by a furin-like enzyme within the trans-Golgi network into a 23-kDa form that is then sequestered into secretory granules.