The mechanism of the cytostatic action of dimerized ribonuclease A toward cultured hepatoma cells was investigated. A decrease in mitotic index, modifications of adsorptive properties of the pericellular membrane and inhibition of the degradation of two different proteins taken up by endocytosis are the first cell functions to be affected by the dimer. This effect on protein digestion is not due to an inhibition of proteolytic enzymes. The intracellular localization of exogenous protein and of ribonuclease dimer was studied by cell fractionation. When proteins (horseradish peroxidase or rabbit immunoglobulin G) are taken up by control hepatoma cells, they are first associated with phagosomes equilibrating at a lower density than lysosomes; their density distribution gradually becomes similar to that of lysosomes. When cells are pre-exposed to ribonuclease dimer, this modification of the density distribution as a function of time no longer occurs, although these proteins are still intracellular, as indicated by fractionation by differential centrifugation. During the first hour after addition of ribonuclease dimer, kinetic studies show an increased fixation of peroxidase to the cell membrane. Protein release into the culture medium is also increased. These results can be explained either by an absence of fusion between phagosomes and lysosomes, or by an inhibition of the discharge of peroxidase adsorbed to the phagosomal membrane after fusion.