The interaction of epidermal growth factor (EGF) with cell surface receptors and their subsequent endocytosis in isolated rat hepatocytes were analyzed by measuring changes in the concentrations of cell surface-bound, internalized, and degraded EGF. The kinetic model proposed by Wiley and Cunningham (Cell 25: 433-440, 1981) and Gex-Fabry and Delisi [Am. J. Physiol. 247 (Regulatory Integrative Comp. Physiol. 16): R768-R779, 1984] was basically utilized for the model analysis. The following kinetic parameters were obtained: association and dissociation rate constants for EGF-receptor interaction, internalization rate constant for EGF-receptor complex (kappa e), internalization rate constant for free receptor (kappa t), sequestration rate constant (kappa s) of the complex from shallow (exchangeable) to deep (nonexchangeable) membraneous compartment, intracellular degradation rate constant and initial cell-surface receptor density. The kappa s value, which was obtained by analyzing the time profiles of EGF association with cells, was approximately 5-10 times larger than the kappa e value determined by directly measuring internalized EGF with the acid-washing technique. This suggests the necessary presence of deep (nonexchanging) compartment of the complex in the plasma membrane. The calculated kappa e value is at least several times larger than the kappa t value, yielding the kinetic basis for the occurrence of receptor downregulation induced by excess EGF. We conclude that, in the overall receptor-mediated processing of EGF after bound to the cell surface receptors, the dissociation process is rapid [half-time (t1/2) less than 1 min], the degradation process is much slower (t1/2 approximately equal to 3 h), and the receptor internalization process is intermediate (t1/2 approximately equal to 6-7 min). In addition, two pools for EGF-receptor complex in the plasma membrane seem to be present, although their identification cannot be made.