The mechanism of inactivation of myeloperoxidase purified from rat bone marrow by propylthiouracil (PTU) was studied. PTU inhibited not only the peroxidase activity but also the chlorinating activity of myeloperoxidase in a concentration dependent manner. When myeloperoxidase was treated with PTU and hydrogen peroxide (5 microM), inactivation of the enzyme was still observed after the excess reagents were removed by a column of Sephadex G-25. The treatment of the enzyme with PTU in the absence of hydrogen peroxide caused a slight inhibition of the enzyme activity. In addition, [14C]PTU became bound to myeloperoxidase in the presence of hydrogen peroxide. Difference spectrum of myeloperoxidase incubated with the small (0.1 mM) and large (2 mM) amounts of hydrogen peroxide revealed the formation of compounds II and III, respectively. Difference spectrum of myeloperoxidase treated with PTU in the presence of a low concentration of hydrogen peroxide (5 microM) was similar to that of compound II. Therefore, these results indicate that PTU inactivates myeloperoxidase through binding to the enzyme and the conversion to a compound II-like form in the presence of hydrogen peroxide.