Peripheral blood monocytes incubated in a serum-free medium degraded serum amyloid A (SAA) protein along three pathways. Of 20 normal subjects, 8 degraded SAA completely with no detectable intermediates. Eight subjects transiently produced an amyloid A (AA)-like intermediate which comigrated on sodium dodecyl sulfate-polyacrylamide gel electrophoresis (PAGE) with tissue AA protein and reacted with antisera to AA, whereas four subjects yielded a persistent AA-like intermediate on PAGE. This group also failed to degrade tissue AA protein. Cells from 10 patients with amyloidosis fell into the second group. The responsible enzymes appear to be serine proteases because they are inhibited by disopropyl fluorophosphate. They were not affected by epsilon-amino caproic acid, L-1-tosylamide-2-phenylethyl chloromethyl ketone, or N-alpha-p-tosyl-L-lysine chlormethyl ketone. It appears possible that the enzymes are associated with the outer membrane of the cell because only a small fraction of the activity is secreted into the medium and because enzyme activity remains after fixation of the cells with glutaraldehyde which completely stops phagocytosis. Perhaps differences in patterns of proteolysis may play a role in the predisposition to amyloidosis.