Intravacuolar proteolysis appears to be an important component of antigen presentation, the activation of peptide hormones, and the conversion of biologically important mediators from inactive precursors. Cathepsin D has been identified in the endosomes of rabbit alveolar macrophages by biochemical analyses [Diment and Stahl, J. Biol. Chem. 260,15311, 1985; Diment et al., J. Biol. Chem. 263,6901, 1988]. Using affinity-purified goat antirabbit cathepsin D IgG, we have localized cathepsin D to the endosomes of rabbit alveolar macrophages. Immunofluorescent staining of frozen sections showed labeling in lysosomes and small vesicles in the periphery of the cell. Label was not seen on the plasma membrane. With immunoperoxidase labeling at the electron microscopic level on cells containing endocytosed mannose-BSA gold, we saw labeling in endosomes and classical lysosomes. When the results were quantitated using immunogold labeling of thin cryosections, we found that the majority of cathepsin D (62.2%) was present in lysosomes, 4.0% in large clear vacuoles, a surprisingly high percentage (29.3%) in small vesicles, 4.9% in endosomes, and none on the plasma membrane. We conclude from this study that, in addition to being present in lysosomes, cathepsin D is present in endosomes and in small peripheral vesicles.