The human colon carcinoma cell line, Caco-2, produces insulin-like growth factor binding protein-3 (IGFBP-3), the secretion of which correlates with markers of enterocyte differentiation. To investigate whether IGFBP-3 inhibits proliferation or induces differentiation, Caco-2 cells were stably transfected with an IGFBP-3 cDNA expression construct or pcDNA3 vector as a control. Accumulation of IGFBP-3 mRNA and secretion of the protein into conditioned medium 9 days after plating were readily detected in the transfected cells, whereas these parameters were undetectable in pcDNA3-transfected cells. Insulin-like growth factor binding protein-3-expressing cells grew at a rate similar to the controls for 6 days after plating, but achieved a much lower final density between days 10 and 12. By day 9 of culture, accumulation of sucrase-isomaltase mRNA, a marker of enterocytic differentiation of Caco-2 cells, was evident in the IGFBP-3-expressing cells, but was undetectable in the controls. These results indicate that IGFBP-3 may inhibit proliferation and induce early differentiation of Caco-2 cells.