Myeloperoxidase (MPO) deficiency is a common inherited disorder linked to increased susceptibility to infection and malignancy. We identified a novel missense mutation in the MPO gene at codon 173 whereby tyrosine is replaced with cysteine (Y173C) that is associated with MPO deficiency and assessed its impact on MPO processing and targeting in transfectants expressing normal or mutant proteins. Although the precursor synthesized by cells expressing the Y173C mutation (MPOY173C) was glycosylated, associated with the molecular chaperones calreticulin and calnexin, and acquired heme, it was neither proteolytically processed to mature MPO subunits nor secreted. After prolonged association with calreticulin and calnexin in the endoplasmic reticulum, MPOY173C was degraded. Furthermore, the 20S proteasome inhibitor N-acetyl-L-leucinyl-L-leucinyl-L-norleucinyl inhibited its degradation, suggesting that the proteasome mediates proteolysis of MPOY173C and, thus, participates in quality control in this novel form of hereditary MPO deficiency.