1. Propylthiouracil (PTU) was degraded by myeloperoxidase (MPO) or eosinophil peroxidase (EPO), purified from rat bone marrow, in the presence of H2O2 and Cl-. In the absence of either H2O2 or Cl-, MPO and EPO do not degrade PTU. Optimum concentrations of KCl for MPO and EPO were 50 and 250 mM, respectively. 2. The characteristics of PTU degradation by MPO-H2O2-Cl- were similar to those of the chlorinating activity of the peroxidase. 3. Hypochlorous acid as well as MPO-H2O2-Cl- also degraded PTU. Metabolites of PTU degradation by MPO-H2O2-Cl-, which were separated by C18 reversed phase h.p.l.c., were the same as those produced by hypochlorous acid. 4. Of the metabolites of PTU formed by MPO-H2O2-Cl-, one was identified as PTU sulphonic acid (6-propyl-4-hydroxypyrimidine-2-sulphonate) and another seemed to be propyluracil.