Somatostatin (SRIF) binding, internalization, and intracellular processing in primary culture of anterior pituitary cells have been studied using somatostatin coupled to an electron-opaque marker, colloidal gold. Initially, after 2 min of incubation (37 C), gold-conjugated SRIF is localized on the cell surface, with 38% of the marker being found around microvilli, 10% at the junction of secretion vesicles with the plasma membrane, and 51% distributed over the remaining areas of the cell membrane. There was no internalization of SRIF at this time. After 20 min of incubation, distribution of the cell-surface bound hormone was similar to that at 2 min (40.6% at microvilli, 12% at the junction with the secretion vesicle, and 47.4% over the rest of the plasma membrane). However, 12% of the electron-opaque markers were found intracellularly in association with coated vesicles, intermediate-sized vesicles, lysosomes, and Golgi structures. SRIF did not enter pituitary cells at 4 C. To study the role of coated vesicles in internalization of SRIF, we have measured somatostatin binding to isolated coated vesicles before and after various treatments and sonication. SRIF binding to sonicated vesicles (3.46 +/- 0.36 fmol/micrograms protein), was much greater than to intact ones (0.75 +/- 0.16 fmol/micrograms protein), suggesting intraluminal localization of SRIF receptors in the coated vesicles. Approximately 80% of SRIF-binding sites were recovered on the intraluminal surface of the coated vesicles. The results of these experiments suggest that internalization of SRIF is a time- and temperature-dependent process. Within the cell, SRIF is routed to either lysosomes or the Golgi apparatus. Coated vesicles participate in intracellular translocation of SRIF-receptor complexes. It appears that the receptor for SRIF being internalized is located on the intraluminal surface of the coated vesicle.