The fate of ¹²⁵I‐labeled transforming growth factor‐β (¹²⁵I‐TGFβ) after binding to its cells surface receptor has been investigated in BALB/c 3T3 mouse fibroblasts. Binding of ¹²⁵I‐TGFβ to cellular receptors at 4°C is pH‐sensitive, being markedly decreased at pH < 6. Most (∼ 90%) of the ¹²⁵I‐TGFβ bound to cells at 4°C can be removed by a brief treatment with acidic medium but is converted into an acid‐resistant state rapidly after shifting the cells to 37°C. Cell‐bound ¹²⁵I‐TGFβ is degraded at 37°C and the degradation products are released into the medium. The lysosomotropic bases chloroquine, methylamine, and ammonium and the carboxylic ionophore monensin inhibit the degradation and release of ¹²⁵I‐TGFβ from the cells. Cells allowed to accumulate ¹²⁵I‐TGFβ intracellularly by the action of chloroquine or monensin were treated with the bifunctional agent disuccinimidyl suberate in the presence of detergent Triton X‐100; this treatment caused the cross‐linking of internalized ¹²⁵I‐TGFβ with the 280‐kilodalton TGFβ receptor component. Under conditions in which sustained binding and degradation of saturating ¹²⁵I‐TGFβ concentrations occurs, there is no marked decrease in the binding capacity of the cells even when protein synthesis is blocked with cycloheximide. These results indicate that after TGFβ binding the TGFβ:receptor complex becomes rapidly internalized and that TGFβ is directed towards lysosomes where it is degraded and released. However, the cell surface is replenished with TGFβ receptors recycled after internalization or supplied by a large intracellular pool.