To decipher the intracellular targeting mechanism by which the major glycoprotein of peripheral nerve myelin, P0, is delivered to myelin after crush injury, as well as to the lysosome after permanent transection injury of the sciatic nerve--experimental paradigms characterized by the presence and absence of axonal regeneration and subsequent myelin assembly, respectively--the role of sulfation of P0 was investigated. P0 sulfation is shown to occur within the Golgi apparatus as a post-translational modification of the oligosaccharide chain which is dependent on processing beyond the action of mannosidase I. It is associated with myelination as observed during development and after crush injury, but does not occur after transection injury, even in the presence of the mannosidase II inhibitor, swainsonine, or the lysosomotrophic agent, L-methionine methyl ester. Although P0 accumulation can be demonstrated with both agents when other precursors are used (e.g. fucose, mannose, amino acids) and indicates lysosomal targeting and delivery of P0 after the action of GlcNAc transferase I, the absence of P0 sulfation after transection suggests that the lack of this modification may result in a default mechanism for lysosomal targeting after nerve transection. Lysosomal degradation of P0 was evaluated after crush injury by pulse-chase analyses with 35SO4 and [3H] mannose in the presence and absence of chlorate, an inhibitor of ATP-sulfarylase. Although P0 sulfation of the oligosaccharide chain is a stable modification whose labeling is dramatically inhibited by chlorate, no decrease in mannose-labeled P0 was seen with chlorate even with prolonged chase times. Because of this lack of degradation of mannose-labeled P0 in the presence of chlorate in the crushed nerve, it is concluded that the absence of P0 sulfation does not result in a default mechanism for lysosomal delivery.