The degradation products generated from A14 and B26 125I-labelled insulins in liver endosomes in vivo and in vitro have been isolated by high-performance liquid chromatography and cleavages in the B chain have been identified by automated radiosequence analysis. In rats sacrificed various times after injection of each of the 125I-labelled insulins, two major degradation products slightly less hydrophobic than intact iodoinsulins were identified; these accounted, at 8 min. for about 45% (A14 125I-labelled insulin) and 15% (B26 125I-labelled insulin) of the total radioactivity recovered, respectively. The products generated from A14 125I-labelled insulin contained an intact A chain, whereas those generated from B26 125I-labelled insulin contained a B chain cleaved at the B16-B17 bond. With B26 125I-labelled insulin, two minor products, with cleavages at the B23-B24 and B24-B25 bonds, were also observed. In vivo chloroquine treatment did not alter the nature but caused a decrease in the amount of insulin degradation products associated with endosomes. When endosomal fractions isolated from iodoinsulin injected rats were incubated at 30 degrees C in isotonic KCl, a rapid degradation of iodoinsulin, maximal at pH 6, was observed. With A14 125I-labelled insulin, the two major degradation products identified in vivo were generated along with monoiodotyrosine, but with B26 125I-labelled insulin monoiodotyrosine was the main product formed. Addition of ATP, presumably by decreasing the endosomal pH, shifted the medium pH for maximal iodoinsulin degradation to about 7-8. These studies have allowed a direct identification of two previously suggested cleavage sites in the B chain. They have also shown that the degradation products generated in cell-free endosomes under conditions that promote endosomal acidification are similar to those identified in vivo.