A lysosomal pathway of proteolysis is selective for cellular proteins containing peptide sequences biochemically related to Lys-Phe-Glu-Arg-Gln (KFERQ). This pathway is activated in confluent cultured cells that are deprived of serum growth factors and in certain tissues of fasted animals. We have reconstituted this lysosomal degradation pathway in vitro. Transport into lysosomes requires a KFERQ-like sequence in the substrate protein and uptake and/or degradation is stimulated by ATP. A member of the heat shock 70 kDa protein family, the 73 kDa constitutive heat shock protein, binds to KFERQ-like peptide regions within proteins and, in some as yet unidentified manner, facilitates transfer of the proteins into lysosomes. Several possible mechanisms of selective protein transport into lysosomes are discussed.