In the present study, we have examined whether insulin degradation products are present on the surface of isolated rat hepatocytes and can be removed by an acid dissociation technique. Hepatocytes were incubated with [125I]insulin for 30 minutes, rapidly washed to remove unbound insulin, and then briefly exposed to acidic conditions (pH 5.0) to remove bound hormone from the cell surface. The radioactive material removed from the cell by acid dissociation and that remaining with the cells were separately analyzed by high performance liquid chromatography. The two primary degradation products of insulin present in control cell extracts were found only with the cell-associated material after acid dissociation. The insulin-sized radioactive material in the extract of acid-dissociable material consisted of only intact [125I]insulin. These results show that the two primary degradation products of insulin in rat hepatocytes are found only intracellularly and suggest that the degradation of the hormone begins after it is internalized.