Localization of hCG binding sites and the process of endocytosis in pseudopregnant rat ovaries were investigated by indirect electron-microscopic immunocytochemistry. Immature female rats were treated with pregnant-mare serum gonadotropin (PMSG) and human chorionic gonadotropin (hCG) to induce ovarian luteinization. Eight days after priming with PMSG-hCG and 1–6 h before sacrifice the animals were given another injection of hCG to bind the receptors. Receptor sites to hCG localized by reaction product were present in most luteal cells, but not in primary follicular cells. The receptor sites were distributed on luteal cell surfaces facing interstitial spaces. Endocytotic pits containing hCG binding sites were rarely seen 1 h after hCG injection. At 2 h, hCG and presumably its receptor were taken up within endocytotic vesicles with the evidence of reaction product coated on the vesicle wall. With time, fusion of endocytotic vesicles with lysosome occurred and the reaction product appeared in phagolysosomes. The reaction product was localized on phagolysosomal inner surface or in free granular form. These findings suggest that hCG and its receptors were internalized through endocytotic pits and endocytotic vesicles and delivered to lysosomes probably for degradation. An additional experiment for localization of acid phosphatase was also performed to delineate the lysosomes and phagolysosomes.