To explore the possible role of proteolytic step(s) in receptor-mediated endocytosis of insulin, the effects of inhibitors of various classes of proteases on the internalization process were studied in isolated rat adipocytes. Intracellular accumulation of receptor-bound 125I-insulin at 37 degrees C was quantitated after rapidly dissociating surface-bound insulin with an acidic buffer (pH 3.0). Of the 23 protease inhibitors tested, only chymotrypsin substrate analogues inhibited insulin internalization. Internalization was decreased 62-90% by five different chymotrypsin substrate analogues: N-acetyl-Tyr ethyl ester, N-acetyl-Phe ethyl ester, N-acetyl-Trp ethyl ester, benzoyl-Tyr ethyl ester, and benzoyl-Tyr amide. The effect of the substrate analogues in inhibiting insulin internalization was dose-dependent, reversible, and required the full structural complement of a chymotrypsin substrate analogue. Cell surface receptor number was unaltered at 12 degrees C. However, concomitant with their inhibition of insulin internalization at 37 degrees C, the chymotrypsin substrate analogues caused a marked increase (160-380%) in surface-bound insulin, indicating trapping of insulin-receptor complexes on the cell surface. Additionally, 1 mM N-acetyl-Tyr ethyl ester decreased overall insulin degradation by 15-20% and also prevented the chloroquine-mediated increase in intracellular insulin, further indicating that surface-bound insulin was prevented from reaching intracellular chloroquine-sensitive degradation sites. The internalization of insulin receptors that were photoaffinity labeled on the cell surface with B2(2-nitro-4-azidophenylacetyl)-des-PheB1-insulin was also inhibited 70-90% by the five chymotrypsin substrate analogues, as determined by the effects of the analogues on the accumulation of trypsin-insensitive (intracellular) 440-kD intact labeled receptors. In summary, these results show that chymotrypsin substrate analogues efficiently inhibit the internalization of insulin and insulin receptors in adipocytes and implicate a possible role for endogenous chymotrypsin-like enzyme(s) or related substances in receptor-mediated endocytosis of insulin.