Loop-tail (Lp) mice show a very severe neural tube defect (craniorachischisis) caused by mutations in the Vangl2 gene (D255E, S464N). Mammalian Vangl1 and Vangl2 are membrane proteins that play critical roles in development such as establishment of planar cell polarity (PCP) in epithelial layers and convergent extension movements during neurogenesis and cardiogenesis. Vangl proteins are thought to assemble with other PCP proteins (Dvl, Pk) to form membrane-bound PCP signaling complexes that provide polarity information to the cell. In the present study, we show that Vangl1 is expressed exclusively at the plasma membrane of transfected MDCK cells, where it is targeted to the basolateral membrane. Experiments with an inserted exofacial HA epitope indicate that the segment delimited by the predicted transmembrane domains 1 and 2 is exposed to the extracellular milieu. Comparative studies of the Lp-associated pathogenic mutation D255E indicate that the targeting of the mutant variant at the plasma membrane is greatly reduced; the mutant variant is predominantly retained intracellularly in endoplasmic reticulum (ER) vesicles colocalizing with the ER marker calreticulin. In addition, the D255E variant shows drastically reduced stability with a half-life of approximately 2 h, compared to >9 h for its wild type counterpart and is rapidly degraded in a proteasome-dependent and MG132 sensitive pathway. These findings highlight a critical role for D255 for normal folding and processing of Vangl proteins, with highly conservative substitutions not tolerated at that site. Our study provide an experimental framework for the analysis of human VANGL mutations recently identified in familial and sporadic cases of spina bifida.