Using a well characterized preparation of hCG, consisting of a mixture of hCG labeled in the a-subunit with 125I and hCG labeled in the β-subunit with 131I (see preceding paper), the hormone-specific preferential retention by granulosa cells in vivo of the radiolabel originally associated with the β-subunit of hCG has been confirmed and extended. Additional studies have shown that this retention is peculiar to the granulosa cells. Luteal and interstitial/thecal elements of the ovary failed to show preferential accumulation of the label originally associated with the β-subunit. Measurement of both radioactivities in crude subtractions of the ovarian tissues revealed that granulosa cells retain the excess of β-subunit label in a plasma membrane/vesicular component. No such preferential retention of label was seen in any of the subfractions obtained from luteal or interstitial/thecal tissues. The radiolabeled components associated with the granulosa cells were shown to be mainly macromolecular by their precipitability with 13% trichloroacetic acid. Luteal tissue degraded the components associated with each label more rapidly than granulosa cells. In contrast, interstitial/thecal tissue degraded very little of the bound labeled components. The differential processing of individual hCG subunits by granulosa cells was shown not to result from different kinetics of binding of serum-borne hormone by two methods. Thus, changes over time in the ability of circulating hormone to bind to LH receptor in vitro were shown not to be a function of the hCG subunit having the label. Moreover, blockade of further radiolabel uptake by injection of a large excess of unlabeled hCG 30min after radiolabel administration did not alter the rise in the ratio of β-subunit label to α-subunit label normally observed in granulosa cells. The ability of kidney tissue to accumulate and metabolize hCG also varied with the physiological state. Within the limitations of following the radioiodides added to proteins rather than the peptides themselves, these studies demonstrate that differences exist in the metabolism of hCG by the various tftrget cells of the ovary and that changes in processing occur during luteinization.