Ca⁺-activated Cl⁻ channel (CLCA) proteins are encoded by a family of highly related and clustered genes in mammals that are markedly upregulated in inflammation and have been shown to affect chloride transport. Here we describe the cellular processing and regulatory sequences underlying murine (m) CLCA4 proteins. The 125-kDa mCLCA4 gene product is cleaved to 90- and 40-kDa fragments, and the NH₂- and COOH-terminal fragments are secreted, where they are found in cell media and associated with the plasma membrane. The 125-kDa full-length protein is only found in the endoplasmic reticulum (ER), and specific luminal diarginine retention and dileucine forward trafficking signals contained within the CLCA4 sequence regulate export from the ER and proteolytic processing. Mutation of the dileucine luminal sequences resulted in ER trapping of the immaturely glycosylated 125-kDa peptide, indicating that proteolytic cleavage occurs following recognition of the trafficking motifs. Moreover, the mutated dileucine and diarginine signal sequences directed processing of a secreted form of enhanced green fluorescent protein in a manner consistent with the effects on mCLCA4.