To investigate the stepwise autophagic-lysosomal processing of hepatocellular proteins, the abundant cytosolic enzyme, betaine:homocysteine methyltransferase (BHMT) was used as a probe. Full-length (45 kDa) endogenous BHMT was found to be cleaved in an autophagy-dependent (3-methyladenine-sensitive) manner in isolated rat hepatocytes to generate a novel N-terminal 10-kDa fragment (p10) identified and characterized by mass spectrometry. The cleavage site was consistent with cleavage by the asparaginyl proteinase, legumain and indeed a specific inhibitor of this enzyme (AJN-230) was able to completely suppress p10 formation in intact cells, causing instead accumulation of a 42-kDa intermediate. To prevent further degradation of p10 or p42 by the cysteine proteinases present in autophagic vacuoles, the proteinase inhibitor leupeptin had to be present. Asparagine, an inhibitor of amphisome-lysosome fusion, did not detectably impede either p42 or p10 formation, indicating that BHMT processing primarily takes place in amphisomes rather than in lysosomes. Lactate dehydrogenase (LDH) was similarly degraded primarily in amphisomes by leupeptin-sensitive proteolysis, but some additional leupeptin-resistant LDH degradation in lysosomes was also indicated. The autophagic sequestration of BHMT appeared to be nonselective, as the accumulation of p10 (in the presence of leupeptin) or of its precursors (in the additional presence of AJN-230) proceeded at approximately the same rate as the model autophagic cargo, LDH. The complete lack of a cytosolic background makes p10 suitable for use in a "fragment assay" of autophagic activity in whole cells. Incubation of hepatocytes with ammonium chloride, which neutralizes amphisomes as well as lysosomes, caused rapid, irreversible inhibition of legumain activity and stopped all p10 formation. The availability of several methods for selective targeting of legumain in intact cells may facilitate functional studies of this enigmatic enzyme, and perhaps suggest novel ways to reduce its contribution to cancer cell metastasis or autoimmune disease.