Hemoglobin of intact human erythrocytes was labelled with [125I]iodide and these cells were inoculated with late-stage cultures of Plasmodium falciparum. Subcellular parasite particulate material containing intact digestive vacuoles filled with 125I-labelled hemoglobin was incubated in sucrose-buffer medium and degradation of labelled intravacuolar hemoglobin was measured by precipitation with trichloroacetic acid. Proteolysis was maximal at pH 5.0 or in the presence of MgATP at pH 8.0. The stimulatory effect of MgATP was probably due to energization of a proton pump activity as reported by others (Krogstad, D.J., Schlesinger, P.H. and Gluzman, I.Y. (1984) J. Cell Biol. 101, 2302-2309). Proteolysis was also inhibited by ionophores and antimalarials. These results suggest that P. falciparum digestive vacuoles have an ATP-dependent acidification mechanism similar to mammalian lysosomes but with some exceptions. The properties of this intravacuolar proteolysis were remarkably similar to intralysosomal proteolysis in mouse liver or kidney preparations.