Alterations in the cardiac tissue and serum acid hydrolase activities were studied in chronic streptozotocin-induced diabetes in rats. No changes were observed in total cardiac tissue homogenate lysosomal enzyme activities at 4 weeks of diabetes but there were significant alterations in the distribution of selected enzymes. Significant decreases in nonsedimentable beta-N-acetylglucosaminidase (NAG) and beta-galactosidase (Gal) activities were observed at 4 weeks of diabetes. At 8 weeks of the disease, decreased activities of NAG and Gal were observed in heart homogenates but no changes were apparent in alpha-mannosidase (Man) or acid phosphatase activities. Nonsedimentable activities of NAG and both sedimentable and nonsedimentable activities of Gal were decreased at 8 weeks. At 16 weeks of the diabetic condition, increased activities of NAG, Gal and acid phosphatase were observed. This increase at 16 weeks of the disease was due to an increase in sedimentable enzyme activity. At all times of diabetes, serum enzyme activities were significantly increased. Insulin treatment reversed all of the observed changes in tissue homogenates, but serum levels were not completely reversed. These results suggest that cardiac lysosomal hydrolases are probably only involved in the later stages of the diabetic cardiomyopathy when extensive ultrastructural derangements are evident. The present evidence also suggests that the heart may be a source of serum hydrolase activities.