The basement membrane protein laminin-5 (LN5; alpha3beta3gamma2) undergoes specific proteolytic processing of the 190-kDa alpha3 chain to the 160-kDa form after the secretion, releasing its COOH-terminal, LG4-5 domain. To clarify the biological significance of this processing, we tried to express a recombinant precursor LN5 with a 190-kDa alpha3 chain (pre-LN5), in which the cleavage sequence Gln-Asp was changed to Ala-Ala by point mutation. When the wild-type and mutated LN5 heterotrimers were expressed in HEK293 cells, the wild-type alpha3 chain was completely cleaved, whereas the mutated alpha3 chain was partially cleaved at the same cleavage site (Ala-Ala). pre-LN5 was preferentially deposited on the extracellular matrix, but this deposition was effectively blocked by exogenous heparin. This suggests that interaction between the LG4-5 domain and heparan sulfate proteoglycans on the cell surface and/or extracellular matrix is important in the matrix assembly of LN5. Next, we purified both pre-LN5 and the mature LN5 with the processed, 160-kDa alpha3 chain (mat-LN5) from the conditioned medium of the HEK293 cells and compared their biological activities. mat-LN5 showed higher activities to promote cell adhesion, cell scattering, cell migration, and neurite outgrowth than pre-LN5. These results indicate that the proteolytic removal of LG4-5 from the 190-kDa alpha3 chain converts the precursor LN5 from a less active form to a fully active form. Furthermore, the released LG4-5 fragment stimulated the neurite outgrowth in the presence of mat-LN5, suggesting that LG4-5 synergistically enhances integrin signaling as it is released from the precursor LN5.