l-Tyrosylglycine O[(35)S]-sulphate is metabolized by the rat to yield the O[(35)S]-sulphate esters of l-tyrosine, p-hydroxyphenylpyruvic acid and p-hydroxyphenylacetic acid. 2. The proportion of the administered peptide which is excreted as l-tyrosine O[(35)S]-sulphate is greater at a higher dose. 3. An enzyme capable of hydrolysing the peptide bond of l-tyrosylglycine O[(35)S]-sulphate to yield l-tyrosine O[(35)S]-sulphate has been detected in rat liver and kidney. 4. The activity of this enzyme is completely inhibited by a large excess of l-tyrosylglycine.