The degradation of insulin by isolated rat liver cells has been studied. The phenomenon is time- and temperature-dependent. After sixty minutes' exposure to 1.5 times 10-6 cells/ml, about 50 per cent, 15 per cent, and less than 5 per cent of insulin at 1.5 muM. are degraded at 37 degrees C., 20 degrees, and 0 degrees C., respectively. The methods used to measure the hormone degradation effect the apparent Vmax. Higher values of Vmax are found when radioimmunoassay rather than precipitation by trichloracetic acid and absorption to talc is used. However, the apparent Km. (0.27 muM) is virtually the same with any of methods used. N-ethyl-maleimide and Trasylol are potent inhibitors, whereas GSH increases the hormone degradation. Proinsulin acts as competitive inhibitor (apparent Ki equals 0.35 muM.). Gel filtration patterns of incubation supernates suggest that several enzymatic systems may be operative in the degradation of insulin by the liver cells. Glutathione-insulin-transhydrogenase is suggested by the appearance of a component that has the same elution volume as the A chain, but the inhibitory effects of trasylol on insulin degradation, as well as qualitative and quantitative similarities with insulin proteases, suggest that a proteolytic similiarities with insulin proteases, suggest that a proteolytic mechanism is involved. The insulin-degrading system in isolated liver cells closely resembles that observed in purified liver plasma membranes and in the isolated perfused liver. Such similarities stress the possible significance of the degradation process in the regulation of insulin action. These studies are also important for the quantitative analysis of insulin interaction with its specific receptors in isolated liver cells.