α₁-Microglobulin is a 26-kd protein, widespread in plasma and tissues and well-conserved among vertebrates. α₁-Microglobulin belongs to the lipocalins, a protein superfamily with highly conserved 3-dimensional structures, forming an internal ligand binding pocket. The protein, isolated from urine, has a heterogeneous yellow-brown chromophore bound covalently to amino acid side groups around the entrance of the lipocalin pocket. α₁-Microglobulin is found in blood both in free form and complex-bound to immunoglobulin A (IgA) via a half-cystine residue at position 34. It is shown here that an α₁-microglobulin species, which we name t–α₁-microglobulin (t = truncated), with a free Cys34 thiol group, lacking its C-terminal tetrapeptide, LIPR, and with a more polar environment around the entrance of the lipocalin pocket, is released from IgA–α₁-microglobulin as well as from free α₁-microglobulin when exposed to the cytosolic side of erythrocyte membranes or to purified oxyhemoglobin. The processed t–α₁-microglobulin binds heme and the α₁-microglobulin–heme complex shows a time-dependent spectral rearrangement, suggestive of degradation of heme concomitantly with formation of a heterogeneous chromophore associated with the protein. The processed t–α₁-microglobulin is found in normal and pathologic human urine, indicating that the cleavage process occurs in vivo. The results suggest that α₁-microglobulin is involved in extracellular heme catabolism.