We studied the distribution of the molecular forms of acetylcholinesterase (AChE) in a stable variant (F3) of the rat pheochromocytoma cell line, PC12, that lacks a heparan sulfate proteoglycan on the cell surface. After treatment with nerve growth factor F3 cells synthesize less 4S enzyme, and more 10S and 16S enzyme than normal PC12 cells. This distribution is similar to that seen in normal cells after incubation with beta-D-xylosides, molecules that interfere with proteoglycan assembly. Using collagenase treatment and membrane-permeable and -impermeable inhibitors of AChE, we determined the cellular location of the AChE forms. Although in normal cells greater than 90% of the 16S AChE is on the cell surface, approximately 60% is present in an internal pool in the variant. Following irreversible inhibition of all forms of AChE in the variant, the newly synthesized 16S AChE appears in the internal pool after a 1-h lag, but is not detected on the cell surface until after 2.5 h. Our results thus show that 16S AChE is assembled internally within neuronal cells and that alterations in the synthesis and distribution of proteoglycans affect the total amount and cellular localization of the 16S AChE form.