The intracellular fate of endocytosed 125I-epidermal growth factor was examined in Rat-1 fibroblasts. Cells were pulse-labeled for 5 min in 125I-EGF and chased for 3 hr with an excess of unlabeled EGF. At various times after application of the cold chase, cells were harvested and processed for isopycnic gradient centrifugation on Percoll gradients. Within the period of the 125I-EGF pulse, about 50% of the 125I activity appeared in an organelle containing peak in the gradients. By 20 min after application of the cold chase, 125I activity in the organelle peak began to decrease, and the decrease continued over the next few hours. The 125I activity which exited from its organelle-associated location appeared to be present in the cytosol and was apparently not confined within organelles. Lysosomotropic amines inhibited the egress of 125I activity from the organelle compartment. The 125I activity from both organelle and nonorganelle compartments reacted as completely as authentic 125I-EGF with anti-EGF antibodies and was similar in size to authentic 125I-EGF. Little or no intracellular low molecular weight 125I-containing compounds were detected, although they accumulated in the culture medium. Analytical isoelectric focusing revealed that the organelle-bound form of endocytosed 125I-EGF was more acidic than authentic 125I-EGF and, upon exiting from the organelle compartment, was processed to an even more acidic form. It was the second macromolecular form of processed 125I-EGF that was ultimately degraded to low molecular weight compounds which were then externalized from the cells.