When rat hepatocytes were cultured in the presence of various specific protease inhibitors, lysosomal acid phospholipase A1 activity decreased progressively. Exposure of the cultured cells to 0.1 micrograms/ml of pepstatin, E 64, leupeptin or chymostatin also reduced the catalytic activities of several lysosomal marker enzymes. Irrespective of the protease inhibitor type employed, acid phospholipase A1 activity reacted most sensitively, followed by acid phosphatase, acid beta-N-acetyl-D-hexosaminidase and acid beta-glucuronidase. Of the protease inhibitors studied, pepstatin appeared to be most potent in reducing lysosomal enzyme activities in cultured hepatocytes. These findings suggest that proteolytic processes at as yet unknown, possibly extralysosomal sites play an important role in the turnover rates of lysosomal enzymes.