To obtain information about the role of phosphoinositide 3-kinase (PI3K) in the endocytic pathway in hepatocytes, the uptake and intracellular transport of asialo-orosomucoid (ASOR) was followed in cells treated with wortmannin or LY294002. The two inhibitors, at concentrations known to inhibit the enzyme, did not affect internalization or the number of surface asialoglycoprotein receptors, but they caused a paradoxical increase (approx. 50% above control values) in the degradation of ASOR labelled with [(125)I]tyramine cellobiose ([(125)I]TC). Wortmannin or LY204002 inhibited the autophagic sequestration of lactate dehydrogenase very effectively, and the enhanced degradation of [(125)I]TC-ASOR could be an indirect effect of reduced autophagy, as an amino acid mixture known to inhibit autophagy also caused increased degradation of [(125)I]TC-ASOR, and its effect was not additive to that of wortmannin or LY294002. Wortmannin or LY294002 had pronounced effects on the late parts of the endocytic pathway in the hepatocytes: first, dense lysosomes disappeared and were replaced by swollen vesicles; secondly, degradation of [(125)I]TC-ASOR took place in an organelle of lower buoyant density (in a sucrose gradient) than the bulk of lysosomes (identified in the gradient by lysosomal marker enzymes). With increasing length of incubation with wortmannin or LY294002, the density distributions of the lysosomal markers also shifted to lower density and gradually approached that of the labelled degradation products. The labelled degradation products formed from [(125)I]TC-labelled proteins were trapped at the site of formation, because they did not penetrate the vesicle membranes. The results obtained indicate that internalization and intracellular transport of ASOR to lysomes may take place in the absence of PI3K activity in rat hepatocytes. On the other hand, fusion of late endosomes with lysosomes seems to produce 'hybrid organelles' (active lysosomes) that are unable to mature into dense lysosomes.