Isolated rat hepatocytes, incubated as a suspension in a tissue culture medium (Dulbecco's), are in negative nitrogen balance and exhibit a continuous net release of amino acids and/or urea. The cells also generate ammonia and/or urea by the deamination of medium glutamine. Under normoxic conditions, ammonia is rapidly converted to urea, but under hypoxic conditions, arising, e.g., if the cells are allowed to sediment, ammonia accumulates. By interference with the analytical procedures and the calculation of nitrogen balance, the accumulation of ammonia may give a false impression of cellular hyper-catabolic activity during the first hour of incubation. When this effect has subsided (or been corrected for), it becomes evident that the accumulated ammonia exerts an inhibitory influence on protein degradation, reducing both the total nitrogen release and the liberation of [ 14C]valine from pre-labelled liver cell protein. The fact that protein degradation is inhibited by ammonia may be of considerable importance for the growth of cells under tissue culture conditions, where ammonia is so readily generated by the spontaneous or metabolic deamination of glutamine.