A cytosolic cell-free system from rat liver containing the last three enzymes of the urea cycle, a number of cofactors and the substrates aspartate and citrulline was shown to synthesize urea at near-physiological rates ranging between 0.40 and 1.25 mumol/min per g of liver. This system was used to determine the kinetic parameters for arginase. With saturating amounts of Mn2+ (30 microM), arginine remained at a steady-state concentration of 5-35 microM depending on the aspartate and citrulline supply. Vmax. at micromolar arginine concentrations was between 1.10 and 1.25 mumol/min per g of liver, the K0.5 (arginine) between 6.0 and 6.5 microM and positive co-operativity was observed (Hill coefficient 2). Omission of Mn2+ caused a significant accumulation of arginine during the incubation, suggesting a regulatory effect of arginase. Under these conditions, Vmax. was 1.10-1.65 mumol/min per g of liver and the Km (arginine) increased up to 14.4-21.1 microM. The apparent Ka for Mn2+ in the presence of physiological concentrations of ATP, Mg2+ and arginine was calculated to be maximally 8 microM. Initial-velocity experiments with millimolar arginine concentrations as the direct substrate gave the following results, which are in good agreement with literature data. In the absence of Mn2+, Vmax. was 71.3 mumol/min per g of liver and the Km (arginine) 1.58 mM. With 30 microM-Mn2+, Vmax. was 69.4 mumol/min per g of liver and the Km (arginine) decreased to 0.94 mM. On the basis of our results, we propose the presence of high-affinity and low-affinity sites for arginine on rat liver arginase and postulate that alterations in arginase activity arising from changes in the concentration of arginine and of the cofactor Mn2+ may contribute to the regulation of ureagenesis in vivo.