Agonist-induced internalization of somatostatin receptors determines subsequent cellular responsiveness to peptide agonists and influences somatostatin receptor scintigraphy. To investigate sst2A trafficking, rat sst2A tagged with epitope was expressed in human embryonic kidney cells and tracked by antibody labeling. Confocal microscopic analysis revealed that stimulation with somatostatin and octreotide induced internalization of sst2A. Internalized sst2A remained sequestrated within early endosomes and 60 min after stimulation, internalized sst2A still colocalized with -arrestin1-EGFP, endothelin-converting enzyme-1 (ECE-1), and rab5a. Internalized ¹²⁵I-Tyr¹¹-SST-14 was rapidly hydrolysed by endosomal endopeptidases, with radioactive metabolites being released from the cell. Internalized ¹²⁵I-Tyr¹-octreotide accumulated as an intact peptide and was released from the cell as an intact peptide ligand. We have identified ECE-1 as one of the endopeptidases responsible for inactivation of internalized SST-14. ECE-1-mediated cleavage of SST-14 was inhibited by the specific ECE-1 inhibitor, SM-19712 and by preventing acidification of endosomes using bafilomycin A₁. ECE-1 cleaved SST-14 but not octreotide in an acidic environment. The metallopeptidases angiotensin-1 converting enzyme and endothelin-converting enzyme-2 did not hydrolyse SST-14 or octreotide. Our results show for the first time that stimulation with SST-14 and octreotide induced sequestration of sst2A into early endosomes and that endocytosed SST-14 is degraded by endopeptidases located in early endosomes. Furthermore, octreotide was not degraded by endosomal peptidases and was released as an intact peptide. This mechanism may explain functional differences between octreotide and SST-14 after sst2A stimulation. Moreover, further investigation of endopeptidase-regulated trafficking of neuropeptides may result in novel concepts of neuropeptide receptor inactivation in cancer diagnosis.