When evaluated at 15 C, insulin binding to human erythrocytes is similar to that of human adipocytes fibroblasts, monocytes and placental membranes. At 37 C, however, both insulin binding and degradation by human erythrocytes have a unique character. At this temperature, by the end of the first 30 minutes, erythrocyte specific insulin binding is 3 to 4% of the total available insulin. This percentage of binding remains until the end of the first hour, then for the next four hours, increases linearly to 24%. Intact erythrocytes had negligible degradation of the free 125I-insulin but 56% of the 125I-insulin associated with the erythrocytes was degraded after five hours of incubation at 37 C. The degradation of the bound insulin was determined to be an intracellular property of erythrocytes. This degradation may be the mass action driving force responsible for the increased association of 125I-insulin observed after one hour of incubation. On the other hand, erythrocyte ghosts reached a steady state with 2% of the 125I-insulin bound after 1.5 hours of incubation at 37 C. More than 94% of the bound and free insulins were intact after 5 hours of incubation. These observations indicate, for the first time, that erythrocyte insulin degrading activity is localized inside the cells, not in their membranes, and that the human erythrocyte with its insulin receptors may be one of the important cell types in the metabolism of insulin.