Endogenous peroxidase activity, as demonstrated by the technique of Graham and Karnovsky, was identified in medullary collecting tubule cells and in the cells of renal papillary mucosa of the rat. Peroxidase reactive sites were observed in the perinuclear cisterna, endoplasmic reticulum and cytoplasmic vesicles of such cells. The specificity of the peroxidase reaction verified by means of chemical inhibitors (NaN3, KCN, aminotriazole), denaturation of the enzyme by heat, exclusion or prior oxidation of substrate (diaminobenzidine), and high concentration of H2O2. Prolonged fixation (glutaraldehyde) improved cellular detail but diminished or abolished the peroxidase staining. When exogenous H2O2, was excluded from the incubating medium, a positive reaction was obtained suggesting that H2O2 can be endogenously generated. This observation was confirmed by degradation of tissue-formed H2O2 with beef liver catalase and by blocking endogenous generation of H2O2 with sodium pyruvate. The reaction product is apparently the result of an enzymatic reaction, and the enzyme is most likely a peroxidase. A similar staining reaction was not observed in other tubule segments, including cortical collecting tubules. The significance of this peroxidase activity is discussed in relation to the cellular localization and biosynthesis of renal medullary prostaglandins.