The beta-N-acetylglucosaminidase activity in the lepidopteran insect cell line Sf21 has been studied using pyridylaminated oligosaccharides and chromogenic synthetic glycosides as substrates. Ultracentrifugation experiments indicated that the insect cell beta-N-acetylglucosaminidase exists in a soluble and a membrane-bound form. This latter form accounted for two-thirds of the total activity and was associated with vesicles of the same density as those containing GlcNAc transferase I. Partial membrane association of the enzyme was observed with all substrates tested, i.e. 4-nitrophenyl beta-N-acetylglucosaminide, tri-N-acetylchitotriose, and an N-linked biantennary agalactooligosaccharide. Inhibition studies indicated a single enzyme to be responsible for the hydrolysis of all these substrates. With the biantennary substrate, the beta-N-acetylglucosaminidase exclusively removed beta-N-acetylglucosamine from the alpha 1,3-antenna. GlcNAcMan(5)GlcNAc(2), the primary product of GlcNAc-transferase I, was not perceptibly hydrolyzed. beta-N-Acetylglucosaminidases with the same branch specificity were also found in the lepidopteran cell lines Bm-N and Mb-0503. In contrast, beta-N-acetylglucosaminidase activities from rat or frog (Xenopus laevis) liver and from mung bean seedlings were not membrane-bound, and they did not exhibit a strict branch specificity. An involvement of this unusual beta-N-acetylglucosaminidase in the processing of asparagine-linked oligosaccharides in insects is suggested.