Isolated rat hepatocytes were incubated with A14-[125I]monoiodotyrosyl insulin for 30 min, and labeled material was extracted from the cells and incubation media. The medium and the cell extract were chromatographed on a Sephadex G-50 column, and radioactivity eluting in the position of intact insulin was concentrated and analyzed on HPLC. The HPLC analysis of the cell extract showed two major products eluting from the column at 19 and 23 min, whereas medium extracts showed one prominent product eluting at 14 min. Inclusion of chloroquine in the incubation blocked the formation of cellular products at 19 and 23 min and caused the accumulation of a product eluting at 41 min while not affecting the media products. After sulfitolysis all cellular products contained an intact A-chain. Dansylcadaverine increased media products and altered the cell-extracted product pattern such that it had a major peak at 14 min, similar to media. These results suggest that two pathways for insulin degradation exist within hepatocytes. The extracellular process forms products that are essentially unchanged by chloroquine and dansylcadaverine. The intracellular process is altered by chloroquine and apparently inhibited by dansylcadaverine.