AbstractInsulin‐like growth factor binding proteins (IGFBPs) play important roles in regulating the functions of insulin‐like growth factors (IGFs). Because IGFBPs have very high affinity for IGF‐I and IGF‐II, they can regulate the amount of each growth factor that is able to bind to cell surface receptors, therefore, factors that alter IGFBP affinity have the capacity to regulate IGF actions. Protease activities that are present in cell culture systems and physiologic fluids have been shown to degrade IGFBP‐5. Previously, a region of sequence in a serine protease was identified that was homologous with the N‐terminal 90 amino acids of members of the IGFBP family and with members of the CCN family of proteins. In a prior study, the protease was expressed in human kidney cultured cells and the cell culture supernatants were shown to cleave IGFBP‐5, however, it is unknown whether the purified protease would cleave IGFBP‐5 and whether it would also cleave other specific forms of IGFBPs. In this study, we expressed this protease in an insect cell expression system, purified it to homogeneity and tested its capacity to cleave IGFBP‐5. The expressed protease preferentially cleaved IGFBP‐5, and it had minimal activity toward other forms of IGFBPs. The proteolytic activity of this IGFBPase is inhibited by serine protease inhibitors including PMSF and 3,4‐dichloroisocoumarin, as well as by divalent metal ions such as, Zn and Cu. Mutation of the active site serine resulted in a major reduction in IGFBP‐5 cleavage. The protease binds to heparin and its ability to degrade IGFBP‐5 is blocked in the presence of heparin. Inhibition of the activity of the protease following its secretion by B104 cells resulted in inhibition of IGFBP‐5 proteolysis and IGF‐I stimulation of protein synthesis. Northern blotting revealed that the transcript was expressed in multiple human tissues, including placenta, uterus, prostate, testis, spinal cord, brain, liver, small intestine, thyroid, and spleen. The highest expression was in uterus and placenta, suggesting a possible role of sex steroids in regulating its expression. Understanding the mechanism of how cleavage of IGFBP‐5 by this protease alters its activity will help to further our understanding of the biologic actions of the IGFs. © 2004 Wiley‐Liss, Inc.