The possible mechanism of diabetic serum factor (DSF)-mediated lysosomal degranulation has been investigated. It was observed that pertussis toxin, sodium fluoride and vanadate could significantly inhibit DSF-mediated beta-glucuronidase release, whereas atropine exhibited only a partial blockage against DSF. Since DSF can generate toxic free radicals, various free radical quenchers were tested in order to evaluate their contributions. Superoxide dismutase was found to be the most effective in inhibiting lysosomal release as compared to catalase and peroxidase. The mixtures of all the enzymes failed to exhibit any additive effect. Interaction of DSF with heparin, insulin and Con A revealed that heparin can completely block DSF-mediated lysosomal release. The implications of the observations are discussed.