The precursor for transforming growth factor-alpha, proTGF-alpha, is synthesized as an integral membrane glycoprotein with the mature TGF-alpha sequence located in the extracellular domain. Retrovirally transformed rat embryo fibroblasts (FeSV-Fre cells) expressing the endogenous proTGF-alpha gene release and accumulate in the medium mature TGF-alpha as well as a heterogeneous (17-19 kDa) group of soluble, bioactive TGF-alpha precursor forms. These precursors correspond to the heterogeneously glycosylated extracellular domain of proTGF-alpha which is released from the membrane by proteolytic cleavage. They are designated mesoTGF-alpha to denote their intermediate position in the proTGF-alpha processing pathway. The nature of the carbohydrate linked to mesoTGF-alpha has been examined by treatment with glycosidases and the use of metabolic inhibitors of glycosylation. The results indicate that the TGF-alpha precursors from FeSV-Fre cells contain O-linked carbohydrate as well as sialylated N-linked carbohydrate. Heterogeneous N-linked glycosylation of an 11-kDa core polypeptide accounts for the heterogeneous nature of mesoTGF-alpha. MesoTGF-alpha released by cells treated with inhibitors of N-linked carbohydrate processing appears as a 17-kDa species. Treatment with these inhibitors does not alter significantly the production of mesoTGF-alpha or mature TGF-alpha by the cells. However, treatment of cells with an inhibitor of co-translational N-linked glycosylation, tunicamycin, reduces the accumulation of mesoTGF-alpha in the medium and blocks the production of mature TGF-alpha under conditions in which overall protein synthesis is only minimally affected. These findings suggest that the proTGF-alpha processing activity is limiting in FeSV-Fre cells and other transformed cells that accumulate mesoTGF-alpha in the medium and that proTGF-alpha processing depends on a component whose function may require N-linked glycosylation.