Isolated rat liver lysosomes were incubated with [14C]methemoglobin under various conditions. Optimal pH for the in vitro proteolysis was found to be 4-5. To evaluate whether or not degradation of added proteins could be due to enzyme leakage the integrity of the lysosomes was measured. Isolated lysosomes were found to be stable for up to 10 min of incubation at pH 5.5 and for 30 min at pH 7. The degradation of three different proteins (methemoglobin, ovalbumin, and lysozyme) was analyzed. No correlation was detected between rate of breakdown and physical properties of the proteins. Leupeptin, chloroquine, and propylamine inhibited proteolysis of added proteins by 45-65% in both neutral and acid milieu. Possible energy requirement was tested by the addition of Mg2+ and ATP to the incubation medium. A dose-dependent increase in proteolytic rate was found when ATP was added to the lysosomal suspension, a finding most likely due to acidification of the lysosomes and ensuing increased degradation. GTP and ITP were somewhat less effective. The noncleavable ATP analogue 5'-adenylylimidodiphosphate gave no stimulation. The ATP-driven proteolysis was inhibited by ethylmaleimide. Isolated lysosomes were also incubated with ferritin in order to visualize a possible uptake process of a protein in the electron microscope. Following incubation, ferritin particles were seen inside intralysosomal vesicles which appeared to be formed by invagination of the lysosomal membrane, a process designated microautophagy. The results thus support the notion that isolated lysosomes may micropinocytose and degrade exogenously added proteins and that this process is ATP dependent.