A protein (mLIP) with strong inhibitory activity on PHA-induced lymphocyte proliferation was purified to homogeneity from murine liver. Both the arginase activity and the inhibitory activity were found superimposed on the same peak during gel filtration. The arginase activity of mLIP was identified by determining the arginine degradation products, urea (by alpha-diketone-urea complex formation) and ornithine (by HPLC). The inhibitory activity of mLIP was neutralized by adding more arginine to the culture medium. The mutual action between mLIP and arginine was found to be dose-related. Furthermore, the inhibition and arginase activities were simultaneously absorbed by anti-mLIP affinity column and both reappeared in the acid-eluate. These results indicate that the murine liver-derived inhibitory protein is the liver L-arginase itself.