Insulin-like growth factor (IGF)-binding protein-5 (IGFBP-5) is uniquely regulated throughout MC3T3-E1 osteoblast differentiation: IGFBP-5 is first detectable in conditioned medium (CM) of replicating preosteoblasts (day 5); IGFBP-5 levels peak between culture days 8-12, then decline to almost undetectable levels in mature osteoblast cultures (> day 18) despite the persistence of IGFBP-5 messenger RNA. These observations suggest that IGFBP-5 concentrations may be regulated by posttranslational mechanisms. To determine whether proteolysis contributes to the disappearance of IGFBP-5 in CM of mature osteoblasts, serial samples of MC3T3-E1 cell CM obtained during a 30-day culture period were analyzed for IGFBP-5-degrading protease activity. Using [125I]recombinant human IGFBP-5 substrate zymography, we demonstrated that proteases with M(r) of 52-72 and 97 kilodaltons (kDa) were present in CM, and protease activity increased in concentration as cultures matured. The 52- to 72-kDa proteases were cation dependent and were inhibited by tissue inhibitor of metalloproteinase 1, a specific inhibitor of matrix metalloproteinases (MMPs), identifying them as MMPs. Furthermore, antisera to human MMP-1 and -2 immunoprecipitated IGFBP-5-degrading proteases with M(r) of 52 and 69/72 kDa, respectively, suggesting that homologous murine MMPs degrade IGFBP-5. Finally, MC3T3-E1 cell CM contained immunoreactive MMP-1 and -2, and MMP-2, in particular, increased significantly throughout differentiation. In contrast, the 97-kDa protease was neither inhibited by tissue inhibitor of metalloproteinase 1 nor immunoprecipitated by antisera to MMPs, suggesting that the 97-kDa protease is not a MMP. Together, these data suggest that MMPs along with an unidentified 97-kDa protease degrade IGFBP-5 in MC3T3-E1 cell cultures. Because truncated forms of IGFBP-5 have been shown to enhance the action of IGF in bone cells, IGFBP-5 proteases may be instrumental in IGF-mediated bone morphogenesis.