The endocytosis and intracellular fate of epidermal growth factor (EGF) were studied in A431 cells. After 15-20 min of internalization at 37 degrees C, rhodamine-labeled EGF (EGF-Rh) accumulated into large juxtanuclear compartment consisting of closely related vesicles. This structure was shown to be localized in the para-Golgi region. Fluorescein-labeled transferrin (Tr-FITC) was observed in the same region when added to the cells simultaneously with EGF-Rh. Using microscope spectrofluorometer, we determined that the Tr-FITC-containing para-Golgi structures have a pH of 6.1 +/- 0.3 while lysosomes containing dextran-fluorescein have a pH of 5.0 +/- 0.2. To study the dynamics of EGF-receptor dissociation during endocytosis a mild detergent treatment of living cells was used for extraction of an intracellular receptor-unbound EGF. During the first hour of internalization at 37 degrees C, neither significant dissociation of EGF-receptor complexes nor EGF degradation was observed. After 3 h of endocytosis, the percentage of unbound EGF increased to 55% of the total internalized EGF. These results suggest that EGF remains associated with receptors during endocytosis in A431 cells until it is transferred to lysosomes where the pH of the EGF microenvironment is dropped to 5. A prolonged presence of EGF-receptor complexes in the para-Golgi region might be of importance in mitotic signaling.