Hepatic proteolysis is inhibited by insulin, amino acids and hypoosmotic cell swelling and is stimulated by glucagon. These effectors simultaneously modulate cell volume in the intact liver, as shown by measurements of the intracellular water space. A close relationship exists between the effect on proteolysis and the accompanying cell volume change, regardless of whether hepatic proteolysis was modified by insulin, glucagon, cyclic AMP, glutamine, glycine, barium of hypoosmotic exposure. It is suggested that cell volume changes exerted by hormones and amino acids play a crucial role in the regulation of hepatic proteolysis.