During pregnancy, IGF binding protein-3 (IGFBP-3) is completely proteolyzed to fragments with low affinities for IGFs but appears to transport IGFs normally in high-molecular-mass complexes. We previously reported that synthetic isolated amino- and carboxyl-terminal domains of IGFBP-3 cooperate to bind IGFs, and we investigated whether this is the mechanism whereby proteolyzed IGFBP-3 fragments bind IGFs normally in pregnancy serum. Two fragments of IGFBP-3 have been isolated from pregnancy serum, one with the same N-terminal sequence as intact IGFBP-3 (GASSG) and the other with an N-terminal sequence (160)KVDYE. Recombinant forms of these proteins, IGFBP-3(1-159) and IGFBP-3(160-264), have been synthesized and characterized, demonstrating that although the fragments individually have greatly reduced affinity for IGF complex formation, when combined they cooperate to form complexes with IGF with or without the acid-labile subunit, inhibit IGF transport across endothelial cell monolayers and inhibit IGF-I-induced IGF type I receptor phosphorylation. It is proposed that proteolysis of IGFBP-3 into two discrete complementary fragments does not significantly increase IGF bioavailability, consistent with previous findings that proteolyzed IGFBP-3 in pregnancy serum is functionally normal and circulates as part of the IGF ternary complexes.