The fate of the transferrin receptor during in vitro maturation of sheep reticulocytes has been followed using FITC- and 125I-labeled anti-transferrin-receptor antibodies. Vesicles containing peptides that comigrate with the transferrin receptor on polyacrylamide gels are released during incubation of sheep reticulocytes, tagged with anti-transferrin-receptor antibodies. Vesicle formation does not require the presence of the anti-transferrin-receptor antibodies. Using 125I-surface-labeled reticulocytes, it can be shown that the 125I-labeled material which is released is retained by an immunoaffinity column of the anti-transferrin-receptor antibody. Using reticulocytes tagged with 125I-labeled anti-transferrin-receptor antibodies to follow the formation of vesicles, it can be shown that at 0 degree C or in phosphate-buffered saline the rate of vesicle release is less than that at 37 degrees C in culture medium. There is selective externalization of the antibody-receptor complex since few other membrane proteins are found in the externalized vesicles. The anti-transferrin-receptor antibodies cause redistribution of the receptor into patches that do not appear to be required for vesicle formation.