Insulin-like growth factor binding protein-3 (IG-FBP-3) is degraded by a Zn(2+)-dependent protease(s) produced by human dermal fibroblasts in vitro (Fowlkes, J. (1994) Endocrine J. 2, 63-68). Initial studies using IG-FBP-3-substrate zymography identified several IGFBP-3-degrading proteases with M(r) 52,000-72,000, which were inhibitable by EDTA and were shifted to lower M(r) species after treatment of conditioned medium with an organomercurial, suggesting that they might represent one or more of the matrix metalloproteinases (MMPs). Immunoblotting of conditioned medium demonstrated the presence of proMMP-1 (52 and 55 kDa), proMMP-3 (58 and 60 kDa), and proMMP-2 (72 kDa) whose molecular masses corresponded identically to those of the IGFBP-3-degrading proteases. Degradation of recombinant human (rh) IGFBP-3 by conditioned media was blocked (> 80% inhibition) by tissue inhibitor of metallo-proteinases-1, a specific inhibitor of all MMPs, while removal of MMPs -1, -2, and -3 from conditioned medium by sequential immunoaffinity and gelatin-Sepharose chromatography resulted in the complete loss of IGFBP-3-degrading proteinase activity. Furthermore, human MMP-1, MMP-3, and to a lesser extent MMP-2 degraded rhIGFBP-3 in vitro. Sequence analysis of rhIGFBP-3 cleavage sites produced by MMP-1, -2, or -3 demonstrated that each cleaved within the mid-region of the binding protein, a domain with little or no homology with the other five cloned IGFBPs. These studies suggest that MMPs, beyond their previously described functions as extracellular degrading enzymes, may also exert effects on cellular growth and proliferation via degradation of IGFBP-3, thus enhancing IGF bioavailability.