Proinsulin is converted to equimolar amounts of insulin and connecting peptide (C-peptide) in pancreatic beta cell secretory granules. The fate of C-peptide, which remains soluble in granules while insulin is crystallized, was studied in a rat insulinoma cell line (INS cells). A pulse-chase approach demonstrated that insulin to C-peptide ratios (I/CP) began to rise in INS cells as soon as conversion took place, reaching 2.2:1 at 6 h of chase, and 5.3:1 by 24 h. During the first 4 h of chase, this ratio was inverted in the medium under basal conditions, possibly reflecting preferential secretion of C-peptide via the post granular constitutive-like pathway. However, the amount of C-peptide secreted to the medium (1.4%/h) was trivial compared with the net loss of C-peptide from the INS cells, estimated to be approximately 33% during the 1st h. As no extracellular degradation of insulin or C-peptide was observed, the data show progressive, extensive intracellular degradation of C-peptide. Stimulation of INS granule exocytosis revealed that the I/CP ratio in secretory granules is representative of that of cell extracts, indicating that C-peptide, but not insulin, is lost from functionally competent granules with time. This particular degradative route for C-peptide is thus distinct from crinophagy (fusion of granules and lysosomes) and was found to be much more active in INS cells than in primary islet beta cells.