Mammary epithelial cells isolated from pregnant, nonlactating heifers were grown in vitro using collagen substrates. Using these systems, the truncated form of insulin growth factor-1 (IGF-1) (des-3-IGF-1), IGF-1, and IGF-2 all stimulated a significant (0.5 to 1 fold) increase in cell proliferation (des-3-IGF-1 greater than IGF-1 greater than IGF-2). When grown in media containing serum plus IGF-1, normal bovine mammary cells also produced and secreted at least four species of IGF-binding protein (IGFBP) ranging from 21K to 48K (as demonstrated by ligand blot analysis). However, cells grown in serum free media secreted detectable quantities of only 2 major forms of IGFBP of 34K and 48K. Using immunoblot analysis, these proteins were identified as IGFBP-2 and IGFBP-3, respectively. Both proteins were inducible by the addition of IGF to the serum free media (relative potency; IGF-1 greater than des-3-IGF-1 greater than IGF-2). Using RIA analysis, bovine mammary cells cultured in the presence of IGF-1 produced 20-25 ng/ml IGFBP-2 compared to control cultures which secrete approximately 1.0 ng/ml. Cells exposed to des-3-IGF-1 produced 40-60% less IGFBP-2 whereas insulin and IGF-2 did not stimulate significant IGFBP-2 production. These data indicate that normal bovine mammary cells secret IGFBP-2 and IGFBP-3. This secretion is stimulated by IGF-1 and des-3-IGF-1 suggesting a mechanism for regulating local IGF activity.