Human serum albumin prepared by blood fractionation for clinical purposes was found to degrade when stored at or above 30 degree C. Mass spectrometry and N-terminal sequencing of the protein identified degradation corresponding to the loss of the first two residues, aspartic acid and alanine. The reaction was shown to be dependent upon temperature and the N-terminal alpha-amino group. In addition, comparison with serum albumins derived from other species showed that the instability of the N-terminus was specific to the human albumin sequence. An intact aspartyl-alanyl dipeptide, purified from degraded albumin solutions, differed substantially from a synthetic dipeptide on amino acid analysis, N-terminal sequencing and NMR. It is suggested that the released dipeptide may be cyclic, implying a novel cleavage mechanism.