T4-binding globulin (TBG), the principal thyroid hormone-binding protein of serum, is a member of the serine protease inhibitor (serpin) superfamily. We report a characteristic serpin cleavage product of TBG in sepsis sera. At 49-50 kDa, the TBG remnant is 4-5 kDa smaller than the intact protein and is the same molecular mass as a TBG cleavage product produced by incubation with polymorphonuclear elastase. Incubation with polymorphonuclear leukocytes also produces the 49- to 50-kDa remnant, and this proteolysis is stimulated by zymosan activation. Polymorphonuclear cell cleavage of TBG increases the ratio of free/bound T4. As previously described, in vitro cleavage of TBG by elastase also increases free/bound T4. These findings are consistent with the hypothesis that serine proteases present at inflammatory sites cleave TBG, releasing its hormonal ligands.