The degradation of insulin and glucagon by a highly purified enzyme isolated from rat skeletal muscle was investigated. A sensitive assay for proteolytic degradation of insulin and glucagon using fluorescamine to detect an increase in primary amine groups was established. As measured by an increase in fluorescamine reactive materials, insulin was rapidly degraded by this highly purified enzyme without requiring initial disulfide cleavage. Associated with the increase in fluorescamine reactive materials was a decrease in immunoassayable insulinmglucagon wal also proteolytically degraded by this enzyme but a number of other peptides and proteins including proinsulin, and A and B chains of insulin were not degraded. Thus, we have demonstrated that insulin (and glucagon) can be proteolytically degraded by an enzyme isolated from an insulin sensitive tissue, skeletal muscle. Proteolytic degradation by this enzyme requires the intact insulin molecule rather than separate A and B chains.