The classical form of α1-antitrypsin (α1-AT) deficiency is associated with a mutant α1-ATZ molecule that polymerizes in the endoplasmic reticulum (ER) of liver cells. A subgroup of individuals homozygous for the protease inhibitor (PI) Z allele develop chronic liver injury and are predisposed to hepatocellular carcinoma. In this study we evaluated the primary structure of α1-AT in a family in which three affected members had severe liver disease associated with α1-AT deficiency. We discovered that one sibling was a compound heterozygote with one PI Z allele and a second allele, the PI Z + saar allele, bearing the mutation that characterizes α1-ATZ as well as the mutation that characterizes α1-AT Saarbrucken (α1-AT saar). The mutation in PI saar introduces a premature termination codon resulting in an α1-AT protein truncated for 19 amino acids at its carboxyl terminus. Studies of a second sib with severe liver disease and other living family members did not reveal the presence of the α1-AT saar mutation and therefore do not substantiate a role for this mutation in the liver disease phenotype of this family. However, studies of α1-AT saar and α1-ATZ + saar expressed in heterologous cells show that there is prolonged intracellular retention of these mutants even though they do not have polymerogenic properties. These results therefore have important implications for further understanding the fate of mutant α1-AT molecules, the mechanism of ER retention, and the pathogenesis of liver injury in α1-AT deficiency.