The organelles in two human tumour cell lines in culture - U-937 and K-562 - involved in the receptor mediated endocytosis (RME) of transferrin (Tf) were studied after isolation from homogenates by density gradient separation. They were also studied by electron microscopy after labelling of living cells with Tf coated colloidal gold particles. Three different Tf containing fractions with densities 1.038 (plasma membrane), 1.040 (light endosomes) and 1.051 g/ml (heavy endosomes) were identified. Ultrastructural studies of the distribution of gold label indicated that Tf was present in structures normally involved in RME of other ligands, probably including the recently identified "compartment of uncoupling of receptor-ligand complex" (CURL). The endocytosed iron was found to be rapidly transferred into the cytosol, as shown by density gradient centrifugation. Isoelectric focusing analysis showed that the iron mainly became bound in ferritin. In the hemoglobin synthesizing cell line K-562, however, iron was also inserted into hemoglobin. The finding that heavy and light endosomes process Tf suggests that Tf follows the same route as other ligands, including the epidermal growth factor and low density lipoprotein, in a presumed prelysosomal pathway, despite the fact that Tf does not dissociate from its receptor. Our findings are thus consistent with the notion that an endosome system similar to that in other types of RME is responsible for the cleavage and separation of iron from the carrier Tf.