A single enzyme that proteolytically degrades insulin was isolated from rat skeletal muscle. This enzyme was purified 1000-fold by a series of steps, including affinity chromatography on insulin bound to agarose at the NH2-terminal phenylalanine of the B chain. Insulin linked to agarose at the B-29 lysine residue did not bind the enzyme and, therefore, was not suitable for purification procedures. Insulin linked at the phenylalanine residue was a substrate for the enzyme and was degraded by it; insulin attached to agarose at the lysine residue was not degraded by the enzyme. The purified enzyme preparation yielded one major band on polyacrylamide gel electrophoresis, and elution of this area of the gel yielded insulin-degrading activity. The purified enzyme degraded insulin but not proinsulin, with a Km for insulin of 22 nM and a Ki for proinsulin of 40 nM. The enzyme is sulfhydryldependent, with a physiological pH optimum.