AbstractGlucocorticoids (GCs) at physiological concentrations stimulate osteoprogenitor proliferation and differentiation in rat bone cell populations, and this is mediated in part by an increased response to insulin‐like growth factors (IGFs). Since IGF binding proteins (IGFBPs) modulate IGF actions, we evaluated whether the increased IGF responsiveness might be associated with decreased inhibitory IGFBP‐4 peptide levels. Rat vertebral cells were cultured for up to 20 days with or without dexamethasone (Dex). Cell layer proteins were extracted at day 6, 8, 14, and 20, conditioned media (CM) collected at day 8, 14, and 20, and total RNA isolated at day 14 and 20 of culture. Western blotting showed that cell layer IGFBP‐4 levels were lower, while IGFBP‐4 protease activity in CM was higher, in Dex‐treated cultures. Addition of pregnancy‐associated plasma protein‐A (PAPP‐A) antibody to CM abrogated IGFBP‐4 proteolysis. PAPP‐A mRNA levels were the same in control and Dex‐treated cultures as evaluated by RT‐PCR. Our data demonstrate that activity of the IGFBP‐4 protease, PAPP‐A, in rat bone cell cultures is increased by Dex via post‐transcriptional mechanisms. Since IGFBP‐4 mRNA levels in Dex‐treated cultures were the same as in controls at day 8, slightly lower than in controls at day 14, and higher than in controls at day 20 as shown previously, the decreased IGFBP‐4 peptide levels in Dex‐treated cultures likely result from increased IGFBP‐4 proteolysis by the elevated PAPP‐A enzymatic activity. Our findings underscore a novel mechanism whereby GCs increase IGF responses in rat bone cells via PAPP‐A‐induced IGFBP‐4 proteolysis. © 2005 Wiley‐Liss, Inc.