The subcellular distribution of iron and transferrin has been studied in isolated rat hepatocytes during uptake of transferrin iron. Iron and transferrin are both rapidly transferred from an extracellular to an intracellular compartment in a process which is slowed down when the cells are deprived of ATP and completely blocked when the cells are incubated at 4 degrees C. The transfer of iron occurs at a higher rate than transferrin. The major part of iron is rapidly incorporated into cytosolic ferritin, i.e. after a 15-min incubation at 37 degrees C 60-70% of cell-associated iron is found in the cytosol as ferritin. The rest of the iron is found in mitochondria (5-10%) and, together with transferrin, in light and heavy endosomes. Following incubation at 4 degrees C, both iron and transferrin are confined to the plasma membrane whereas in ATP-depleted cells the majority of iron and transferrin are recovered in heavy endosomes. The results are consistent with receptor-mediated endocytosis as one mechanism for hepatocyte uptake of iron from transferrin but also suggest an alternative route by which transferrin can donate its iron to the cells and rapidly be released to the extracellular environment without undergoing a complete transferrin cycle.