125I-labelled angiotensin II (AII) and [3H]AII showed specific binding to rat mesenteric artery microsomes. The binding in either instance was inhibited by the AII analog saralasin. [3H]AII was not degraded by the microsomes but 125I-labelled AII was degraded. Autoradiography of thin layer chromatograms of 125I-labelled AII treated with microsomes showed the parent peak (Rf = 0.4–0.45) and a single major degradation product peak (Rf = 0.25–0.30), and [125I]NaI had an Rf value higher than both 125I-labelled AII and its degradation product. Chromatography of unlabelled AII or [3H]AII gave the same Rf value as 125I-labelled AII, but unlabelled AIII moved with Rf = 0.55–0.60. The formation of the degradation product was time and membrane concentration dependent. The degradation occurred at pH 6 and 7 but not at pH 8. However, specific binding of 125I-label1ed AII was also lower at pH 8. The degradation could not be completely inhibited by the use of crude particulate fractions instead of microsomes, by preparing membranes in presence of protease inhibitors, or by including protease inhibitors and sulfhydryl agents in the assay medium. However, the degradation product neither showed specific binding to the microsomes nor interfered with the specific binding of 125I-labelled AII. Furthermore, the tightly bound material eluted from the microsomes in presence of 0.05 M acetic acid at 0 °C consisted predominantly of the parent compound. The implications of these findings are discussed both in terms of validity of the binding experiments and possible relationship between the degradation and the receptor binding sites in the membrane.