The effects of chronic ethanol administration on the receptor-mediated endocytosis of insulin were investigated in isolated hepatocytes. When hepatocytes were isolated from rats that were fed an ethanol liquid diet for 5-6 weeks, these cells bound 25% less insulin to their surface membrane than did cells from the chow-fed or pair-fed controls. This decreased binding was likely a result of reduced surface receptor number rather than changes in receptor affinity. Rates of insulin degradation were also reduced by 25-30% in hepatocytes from the ethanol-fed animals. In addition, chronic ethanol feeding induced a defect in the internalization of the receptor-insulin complex and altered the hepatocellular processing of the internalized insulin. These results indicate that chronic ethanol administration impairs both the surface binding and the endocytosis of insulin by the liver.