Binding studies were performed on vascular smooth muscle cells (VSMC) from the rat aorta, using 125I-atrial natriuretic factor (Ser99-Tyr126) (ANF (Ser99-Tyr126] as the ligand. Kinetic studies at 37 degrees C indicated a rapid onset of binding with a maximum total binding of 25% being reached by 60 min. Crosslinking experiments demonstrated that ANF bound to a 120 kDa and a 60 kDa protein with the former dissociating into the 60 kDa species in presence of beta-mercaptoethanol. Of the total radioactivity bound, 15% represented internalized material. Analysis of the medium after different incubation periods revealed a 42% degradation of 125I-ANF by 120 min. At 4 degrees C, no internalization of 125I-ANF was observed. However, surface binding occurred, albeit at a much slower rate, and not reaching a maximum even at the end of 3 h. No degraded material was detected in the extracellular medium even after a 2-h incubation. Chloroquine (100 microM) and monensin (10 microM) significantly increased the cell-associated radioactivity, causing a 2- to 3-fold elevation of internalized material and a 1.5- to 2-fold rise in the surface-bound ligand. Both lysosomotropic agents also inhibited ANF degradation by 70-80%. Kinetic of the intracellular labeled material was analyzed: within 5-10 min it reaches a maximum level and it decreases rapidly. In presence of monensin the intracellular signal was amplified and the decay was minimized. The intracellular material was found to be mostly bound to a 60 kDa protein. These studies suggest an intracellular degradation of ANF, probably in the lysosomal compartment, following receptor-mediated endocytosis.