Rabbit alveolar macrophages were shown to bind 125I-human transferrin in vitro. The binding reaction was characterized by three stages: (1) adsorption of transferrin to the cells, followed by (2) rapid uptake of the protein to reach (3) a constant level of cell-bound transferrin. The latter two stages were dependent upon temperature and metabolic energy. Macrophages released 125I-transferrin rapidly when incubated with unlabelled transferrin. Small quantities of 125I-rabbit and 125I-bovine serum albumin, by comparison, were bound to and released by the cells; the attachment of these proteins may be solely the result of adsorption. Transferrin, 80% saturated with iron, was bound to a greater extent than 10 or 50% saturated transferrin; 10% saturated transferrin was bound more readily than the 50% saturated preparation. The findings are consistent with the presence of a transferrin receptor on the cell membrane of the alveolar macrophage and imply that transferrin may interact directly with this cell type in order to remove or donate iron.