Transport and hydrolysis of glucagon in the rabbit proximal nephron were studied. Iodinated glucagon (0.34 +/- 0.02 pg/nl, mean +/- SE) was microperfused (16.0 +/- 1.1 nl/min) in vitro through proximal straight nephron segments for 30 min. Radiolabeled material, primarily 125I-tyrosine, appeared in the bathing medium in a linear fashion as a function of time (0.406 pg glucagon X mm tubule length-1 X min-1). Hydrolysis of glucagon by proximal tubule homogenates was pH dependent, with a large peak of activity observed at pH 7.0-7.4 and a smaller one at pH 3.0. Analytical cell fractionation studies of proximal tubule cells revealed glucagon-hydrolyzing activity associated with the brush border and cytosol at pH 7.4. Less than 3% of activity was found associated with the contraluminal membrane. Substantial catabolism was observed at lysosomes on lowering the pH to 5.0. Incubation of glucagon directly in the presence of isolated renal cortical microvilli confirmed the presence of a high-capacity glucagon-degrading hydrolase. In addition to glucagon-hydrolyzing activity associated with the proximal nephron, noncortical activity was observed that was not accounted for by proximal tubule hydrolases. The data suggest several mechanisms for renal extraction of glucagon, including hydrolysis by enzymes at the brush border of the proximal tubule, prior to reabsorption of metabolites there. Conversely, enzymes associated with the contraluminal membrane of the proximal nephron probably contribute little to its hydrolysis. Nonproximal extracortical degradation of glucagon may account for its previously observed peritubular hydrolysis.