1. 1. β-casein labelled with 125I and attached to Sepharose 4B was used to show that milk fat globule membrane preparations contain endogenous protease activity. Protelytic activity associated with this membrane was comparable to that of bovine casein on an equivalent protein basis. 2. 2. Auto-proteolysis of milk .fat globule membrane resulted in relatively rapid degradation of a major membrane polypeptide of 70,000 daltons. Slower and more variable degradation of major polypeptides of 155,000 and 34,000 daltons was also observed. Proteolysis was accompanied by accumulation of degradation products with molecular weights of 92,000, 20,000, 18,000, 12,000 and 8500 daltons. 3. 3. Diisopropylfluorophosphate was the most effective inhibitor of proteolysis while phenylmethylsulfonylfluoride was less effective. 4. 4. Plasmin, a proteolytic enzyme normally found in mammalian blood, was shown to be associated with bovine milk fat globule membrane by immunological methods. Plasmin appeared to be the predominant protease of the membrane. 5. 5. Proteolytic activity was associated with milk fat globule membrane despite extensive washing during preparation and could not be extracted with 50 mM lithium diiodosalicylate. © 1979.