A new method has been developed to estimate proteolytic activity available at the cell surface. Radioiodinated protein substrates are covalently linked to modified polystyrene-divinylbenzene beads with various diameters. These beads are presented to viable cells. Secreted enzyme activity is estimated when no contact occurs between beads and cells. Surface associated proteolytic activity is estimated by the increased rate of iodinated peptide release due to a contact between beads and cells. This method was applied to various lymphocyte preparations. In the absence of serum, mouse spleen lymphocytes produce three- to fourfold higher proteolytic activity than lymph node cells. This activity is completely inhibited by serum diluted 1:10. Since the proteolysis is so marked in the case of spleen cells, one must conclude that lymphocytes removed from the serum and treated in buffered mediums at 37 degrees C have enzymatically altered surface properties. Cell surface associated enzyme activity was measured using rat lymph node lymphocytes with less than 0.1% contamination by granulocytes. This predominantly thymus derived, T cell population had 30% increase in proteolysis due to contact between cells and solid-phase localized substrate of casein. The released enzymatic activity was inhibited by diisopropylfluorophosphate, but its effect on the surface associated enzyme activity remains questionable since it perturbs several membrane functions.