It was previously proposed (Varandani, P. T., Proc Natl Acad Sci 69:1681, 1972) that insulin is first degraded by rat liver homogenates in an enzyme-catalyzed reductive process by microsomal glutathione-insulin transhydrogenase before being proteolytically cleaved by the cytosolic enzyme activity designated insulin protease. This study was, however, carried out with concentrations of the hormone 10,000 times the maximal concentration seen in peripheral blood. In the present study, physiological levels of insulin (approximately 0.1 nM) and concentrations of reduced and oxidized glutathione approximating the reductive potentials of normal liver were used. Rates of degradation by separable particulate and soluble components of the homogenate were determined by following enzymatic conversion of [125I]-iodoinsulin to the trichloroacetic acid-solube form. Assessment of the mode of degradation was determined by gel filtration on Sephadex G-50 in the presence of 1 M acetic acid-6M urea. From these studies it was seen that 1) insulin is reduced at a very significant rate nonenzymatically; 2) during short periods of incubation (30 sec) where no significant hormone is reduced nonenzymatically, the rate of cleavage by the insulin protease present in the cytosol is extremely high and the microsomal GIT activity is negligible; and 3) insulin destruction noted in isolated liver cells and perfused liver is most probably due to the insulin protease activity of the cytosol.