1. Isolated parenchymal cells were prepared by collagenase perfusion of livers from fed rats that had been previously injected with [(3)H]leucine to label liver proteins. When these cells were incubated in a salts medium containing glucose, gelatin and EDTA, cellular integrity was maintained over a period of 6h. 2. Cells incubated in the presence of 2mm-leucine to minimize radioactive isotope reincorporation released [(3)H]leucine into the medium at a rate accounting for the degradation of 4.5% of the labelled cell protein per h. 3. Degradation of [(3)H]protein in these cells was inhibited by insulin and by certain amino acids, of which tryptophan and phenylalanine were the most effective. 4. Protein degradation was decreased by several proteinase inhibitors, particularly those that are known to inhibit lysosomal cathepsin B, and by inhibitors of cell-energy production. 5. Ammonia inhibited degradation, but only at concentrations above 1.8mm. Aliphatic analogues of ammonia were effective at lower concentrations than was ammonia. 6. High concentrations of ammonia inhibited degradation by 50%. The extent of this inhibition could not be increased further by the addition of the cathepsin B inhibitor leupeptin, which by itself inhibited degradation by approx. 30%. 7. The sensitivity of proteolysis in isolated hepatocytes to these various inhibitory agents is discussed in relation to their possible modes of action.