The presence of a soluble, truncated form of the IGF-II/Man-6-P receptor in serum has suggested that cleavage from the cell surface may be an initial step in the degradation of this protein (MacDonald, R. G., Tepper, M. A., Clairmont, K. B., Perregaux, S. B., and Czech, M. P. (1989) J. Biol. Chem. 264, 3256-3261). In order to test this hypothesis, we pulse-labeled cultured BRL-3A rat liver cells with [35S]methionine and [35S]cysteine and measured the fate of labeled receptor at various times after incubation with unlabeled amino acids. It was found that the appearance of labeled IGF-II/Man-6-P receptor in the medium accounts quantitatively for the loss of labeled receptor from the BRL-3A cells. In similar experiments with Chinese hamster ovary cells, L6 rat myoblasts, and chick embryo fibroblasts, labeled receptor from the cell membranes decreases with a time course corresponding to the appearance of soluble receptor in the medium. The release of labeled receptor into the medium can be blocked by the addition of the protease inhibitors aprotinin, chymostatin, or phenylmethylsulfonyl fluoride, but not antipain, leupeptin, and benzamidine. The results are consistent with the hypothesis that the degradation and loss of cellular IGF-II/Man-6-P receptors occurs by a nonlysosomal mechanism involving their proteolysis and removal into the extracellular fluid.