A highly active cyclic hexapeptide analogue of somatostatin, Cyclo(N-Me-L-Ala-L-Tyr-D-Trp-L-Lys-L-Val-L-Phe), L-363,586, was found to improve the control of postprandial hyperglycemia in diabetic animals when given in combination with insulin. The compound is reported to be relatively stable in blood, nasal cavity, and intestinal lumen but undergoes rapid degradation in aqueous solution. The objective of this study was to elucidate the degradation mechanisms based on the kinetic data and the structure of the degradation products. Both pH and temperature had a profound influence on the instability of the peptide in aqueous solution. The data indicated that the peptide was most stable at a pH of about 4.7. The pH-rate profile exhibited specific acid catalysis at a pH less than 3.0 and base catalysis above pH 10.5. The kinetic pKa was determined to be 9.7. This pKa could be attributed to the tyrosine residue. The mechanisms of degradation under acidic and alkaline conditions appear to be different. Identification of the fragments obtained using mass spectrometry and amino acid sequencing suggest that the cyclic compound was cleaved to yield a linear fragment, which underwent further cleavage at both peptide linkages alpha to the tryptophanyl residue. The indole group of that residue is probably the potential nucleophile attacking the adjacent carbonyls. A rate equation for the degradation of the hexapeptide has been proposed.