The mannose 6-phosphate (Man-6-P) lysosomal targeting signal on acid hydrolases is synthesized by the sequential action of uridine 5'-diphosphate-N-acetylglucosamine: lysosomal enzyme N-acetylglucosamine-1-phosphotransferase (GlcNAc-1-phosphotransferase) and GlcNAc-1-phosphodiester alpha-N-acetylglucosaminidase ("uncovering enzyme" or UCE). Mutations in the two genes that encode GlcNAc-1-phosphotransferase give rise to lysosomal storage diseases (mucolipidosis type II and III), whereas no pathological conditions have been associated with the loss of UCE activity. To analyze the consequences of UCE deficiency, the UCE gene was inactivated via insertional mutagenesis in mice. The UCE -/- mice were viable, grew normally and lacked detectable histologic abnormalities. However, the plasma levels of six acid hydrolases were elevated 1.6- to 5.4-fold over wild-type levels. These values underestimate the degree of hydrolase hypersecretion as these enzymes were rapidly cleared from the plasma by the mannose receptor. The secreted hydrolases contained GlcNAc-P-Man diesters, exhibited a decreased affinity for the cation-independent mannose 6-phosphate receptor and failed to bind to the cation-dependent mannose 6-phosphate receptor. These data demonstrate that UCE accounts for all the uncovering activity in the Golgi. We propose that in the absence of UCE, the weak binding of the acid hydrolases to the cation-independent mannose 6-phosphate receptor allows sufficient sorting to lysosomes to prevent the tissue abnormalities seen with GlcNAc-1-phosphotranferase deficiency.