Degradation of 125I-iodoglucagon by human mononuclear cell preparations including one containing 18%-27% monocytes, one consisting of 97% pure monocytes and one consisting of 98% lymphocytes was examined. Intact cells were incubated with 125I-iodoglucagon and degradation assessed by measuring an increase in trichloroacetic acid soluble products or in non-immunoprecipitable products. The preparation consisting of intact lymphocytes did not degrade glucagon. Glucagon was degraded by preparations containing monocytes and this degradation increased with time. No difference between monocyte degradation as measured by trichloroacetic acid or immunoprecipitation was found. Degradation by intact monocytes and by mononuclear homogenates increased sixfold from 4 degrees C to 37 degrees C. Subcellular fractionation demonstrated that the majority of the neutral glucagon degrading activity was in the 100,000 g supernatant (cytosol). Kinetic analyses gave Km values of 1.1 x 10(-5) mol/l, 7.5 x 10(-6) mol/l, and 1.2 x 10(-5) mol/l for glucagon degradation by intact mononuclear cells, homogenates, and cytosol, respectively. Inhibitor studies indicated a sulphydryl dependent enzyme was involved in glucagon degradation by both intact cells and cytosol. The monocyte appeared to be the cell responsible for degradation of glucagon by mononuclear cell preparations. The degradation of glucagon under physiological conditions by intact monocytes was mediated by a neutral proteolytic enzyme, primarily localized in the cytosol.