Protein degradation may take place intracellularly or extracellularly. In digestion of food, digestive enzymes may be released into the environment for extracellular digestion whereby proteolytic cleavage breaks proteins into smaller peptides and amino acids so that they may be absorbed and used. In animals the food may be processed extracellularly in specialized organs or guts, but in many bacteria the food may be internalized via phagocytosis. Microbial degradation of protein in the environment can be regulated by nutrient availability. For example, limitation for major elements in proteins (carbon, nitrogen, and sulfur) induces proteolytic activity in the fungus Neurospora crassa as well as in of soil organism communities.
Proteins in cells are broken into amino acids. This intracellular degradation of protein serves multiple functions: It removes damaged and abnormal proteins and prevents their accumulation. It also serves to regulate cellular processes by removing enzymes and regulatory proteins that are no longer needed. The amino acids may then be reused for protein synthesis.