A rabbit brain beta-galactosidase catalyzes the hydrolysis of synthetic substrates and the natural substrates Gm1-ganglioside, lactosylceramide, and asialo-Gm1-ganglioside. gamma-D-Galactonolactone competitively inhibited hydrolysis of Gm1-ganglioside, lactosylceramide, and MU-galactoside with Ki values of 0.26 mM, 0.13 mM, and 0.77 mM, respectively. From activity plots comparing the degree of inhibition to the inhibitor concentration, a single binding site for each substrate was found. NP-Galactoside inhibited the hydrolysis of Gm1-ganglioside and lactosylceramide, where as Gm1-ganglioside inhibited lactosylceramide hydrolysis. At low substrate concentrations (less than 1 mM), Gm1-ganglioside was hydrolyzed effectively in the presence of NP-galactoside, but at higher concentrations hydrolysis of the latter was preferred. Chloromercuriphenylsulfonic acid and iodoacetate were effective inhibitors of the enzyme, but N-ethylmaleimide was not. The degree of inhibition with chloromercuriphenylsulfonic acid was different for each substrate. At 0.5 mugM chloromercuriphenylsulfonic acid, all activity towards NP-galactoside, 75% towards lactosylceramide, and 25% of the Gm1-ganglioside activity was lost. Two possible models are presented to explain these results. The data favour the presence of multiple active sites in the enzyme.