Insulin-degrading enzyme (IDE) was detected by immunoblot analysis in highly purified rat liver peroxisomes. IDE in the peroxisomal fraction was resistant to proteolysis by trypsin and chymotrypsin under conditions where the peroxisomal membranes remained intact. After sonication of the peroxisomal fraction, IDE was recovered in the supernatant fraction. Further, the localization of IDE in the peroxisomes was shown by immunoelectron microscopy. In addition, IDE isolated from peroxisomes degraded insulin as well as oxidized lysozyme as a model substrate for oxidized proteins. These results suggest that IDE exists in an active form in the matrix of rat liver peroxisomes and is involved in elimination of oxidized proteins in peroxisomes.