Glycogen storage disease type III (GSDIII) is a metabolic disorder characterized by a deficiency in the glycogen debranching enzyme, amylo-1,6-glucosidase,4-α-glucanotransferase (AGL). Patients with GSDIII commonly exhibit hypoglycemia, along with variable organ dysfunction of the liver, muscle or heart tissues. The AGL protein binds to glycogen through its C-terminal region, and possesses two separate domains for the transferase and glucosidase activities. Most causative mutations are nonsense, and how they affect the enzyme is not well understood. Here we investigated four rare missense mutations to determine the molecular basis of how they affect AGL function leading to GSDIII. The L620P mutant primarily abolishes transferase activity while the R1147G variant impairs glucosidase function. Interestingly, mutations in the carbohydrate-binding domain (CBD; G1448R and Y1445ins) are more severe in nature, leading to significant loss of all enzymatic activities and carbohydrate binding ability, as well as enhancing targeting for proteasomal degradation. This region (Y1445–G1448R) displays virtual identity across human and bacterial species, suggesting an important role that has been conserved throughout evolution. Our results clearly indicate that inactivation of either enzymatic activity is sufficient to cause GSDIII disease and suggest that the CBD of AGL plays a major role to coordinate its functions and regulation by the ubiquitin–proteasome system.