We report here the synthesis and properties of a hybrid toxin prepared by covalently coupling diphtheria toxin to transferrin. The purified material contained two major hybrid protein species and was highly cytotoxic to mouse LMTK- cells in culture, reducing protein synthesis by 50% in 24 h at a concentration of 1 ng/ml. Cytotoxic activity was completely abolished in the presence of exogenous transferrin or anti-transferrin or anti-diphtheria toxin, thus demonstrating that the hybrid toxin was intoxicating cells via their transferrin receptors and that both the diphtheria toxin and transferrin components of the conjugate were necessary for activity. NH4Cl, a drug that elevates the pH within acidic intracellular vesicles, also blocked cytotoxic activity, suggesting that a low intravesicular pH was required for activity. The inhibitory effect of NH4Cl could be abolished by exposing toxin-treated cells to acidic culture medium, further implicating an acid-dependent step in the mechanism of the hybrid toxin action. Studies on the kinetics of intoxication also implied that endocytosis and exposure to a low pH within vesicles were necessary for cytotoxicity. Altogether, the results suggest that the transferrin-diphtheria toxin conjugate binds to transferrin receptors and is internalized into acidic endocytic vesicles. The enzymatic moiety of diphtheria toxin then apparently enters the cytosol in response to the low pH and subsequently arrests protein synthesis.