Air-filled albumin microspheres, asialoorosomucoid and formaldehyde-treated serum albumin are selectively taken up by endocytosis in rat liver Kupffer cells, parenchymal cells and endothelial cells, respectively. Intracellular transport and degradation of endocytosed material were studied by subcellular fractionation in sucrose and Nycodenz gradients after intravenous injection of the ligand. By using ligands labeled with 125I-tyramine-cellobiose, the subcellular distribution of labeled degradation products can be studied because they are trapped at the site of formation. The results show that the kinetics of intracellular transport are different in hepatic parenchymal, endothelial and Kupffer cells. In endothelial cells, the ligand is associated with two types of endosomes during the first minutes after internalization and then is transferred rapidly to the lysosomes. In parenchymal cells, 125I-tyramine-cellobiose-asialoorosomucoid was located in a relatively slowly sedimenting vesicle during the first minute after internalization and subsequently in denser endosomes. Degradation of 125I-tyramine-cellobiose-asialoorosomucoid in parenchymal cells started later than that of 125I-tyramine-cellobiose-formaldehyde-treated serum albumin in endothelial cells. Furthermore, the ligand seemed to be transferred relatively slowly from endosomes to lysosomes, and most of the undegraded ligand was in the endosomes. The rate-limiting step of proteolysis in parenchymal cells is probably the transport from endosomes to lysosomes. In Kupffer cells, most 125I-tyramine-cellobiose-microspheres are found as undegraded material in very dense endosomes up to 3 hr after injection. After 20 hr, most of the ligand is degraded in lysosomes distributed at a lower density than the endosomes in Nycodenz and sucrose gradients.