alpha 2u-Globulin, a protein of hepatic origin found in the urine of male rats, is accumulated in the kidney cortex during exposure to unleaded gasoline and has been implicated in the development of fuel hydrocarbon-induced nephropathy and renal neoplasia. The principal morphological feature of gasoline-induced nephropathy is accumulation of hyaline droplets (enlarged secondary lysosomes or phagolysosomes) in epithelial cells of the proximal convoluted tubule S1 and S2 segments. Inhibition of cathepsin B (a major lysosomal peptidase) by treatment of male rats with leupeptin causes rapid accumulation of phagolysosomes and alpha 2u-globulin in the kidney very similar to gasoline exposure. Further, the renal cortical subcellular distribution of alpha 2u-globulin, determined with an electron microscopic immunochemical method, is almost totally confined to phagolysosomes following administration of either gasoline or leupeptin. These results, taken together, indicate that the mechanism of nephrotoxicity of gasoline involves inhibition of renal phagolysosomal proteolysis.