Renal metabolism of Glycyl-glycine (Gly-gly), Glycyl-proline (Gly-pro) and Prolyl-glycine (Pro-gly) was studied in the non-filtering, isolated perfused rat kidney. Gly-gly is metabolized by more than 90% after 120 min of perfusion. Gly-pro is more resistant to degradation and about 75% of the original peptide can be found intact in the perfusate at the end of perfusion. For Pro-gly, only 25% remains intact at the end of the experiment. Glycine was also monitored as another marker for dipeptide degradation and its production increased throughout the perfusion time. In some experiments we also determined the production of proline. We conclude from these experiments that the basolateral membrane, or perhaps the kidney blood vessels, possess an efficient apparatus for the hydrolysis of Gly-gly and Pro-gly. This mechanism is less efficient in the case of Gly-pro. This confirms an earlier hypothesis that dipeptide metabolism does not occur solely in the brush-border membranes.