To study the biochemical mechanisms of bladder tumor invasion, we analyzed specimens of invasive transitional cell carcinoma cell line EJ and non-invasive transitional cell carcinoma cell line RT4 which had been implanted into the bladders of nude mice. Using immunoprobes specific to basement membrane laminin, we observed that superficial but not invasive tumors were surrounded by intact laminin. With immunoprobes specific to cathepsin B, a cysteine proteinase which has the ability to degrade laminin, we demonstrated that cathepsin B is localized in discrete cytoplasmic granules in the non-invasive tumors, and in a more diffuse cytoplasmic pattern in the invasive tumors. Subcellular fractionation followed by immunoblot analysis and enzymatic analysis confirmed that the invasive EJ cells had active cathepsin B localized to its plasma membrane, while non-invasive RT4 cells had cathepsin B confined to lysosomes. Furthermore, immunoblot analysis revealed that invasive EJ cells had the mature form of cathepsin B with a molecular weight of 25 kD, while non-invasive RT4 cells had predominantly precursor forms with molecular weights between 30 and 35 kD. In vitro degradation assays with plasma membrane fractions isolated from invasive EJ cells and non-invasive RT4 cells demonstrated that the plasma membrane of EJ cells but not that of the RT4 cells had the ability to degrade purified laminin, and that the degradative products were similar to those obtained with purified cathepsin B. We conclude that invasive tumor cells have enhanced cathepsin B in their plasma membranes which may be used to degrade basement membrane components such as laminin and thereby facilitate tumor invasion.