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PC12 rat pheochromocytoma cells were found to contain and release into the culture medium cysteine proteinase inhibitors, cystatins. Inhibitory activities in cell extracts and in spent culture media were assayed by titration of papain using a sensitive fluorescent method. Partial purification of the inhibitors using gel-exclusion and ion exchange chromatography and immunoblotting indicated that PC 12 cells contain high and low molecular weight cystatins. The low molecular weight (14 to 17 kDa) cystatins reacted with antibody against human cystatin C. Using the same antibody, cystatin-like immunoreactive material was localized in the cytoplasm of PC12 cells. Treatment of PC12 cells with sodium butyrate (6 mM), which is known to induce chromaffin cell-type differentiation, inhibited cell proliferation and led to a significant increase in cystatin level. The data suggest that cystatins in PC 12 cells may be involved in differentiation processes. The well-characterized PC12 cells, capable of neuronal or chromaffin cell differentiation, will provide a useful cell type to study the regulation of cystatin gene expression and the physiologic role (s) of cystatins.