In human blood, cortisol is transported by a plasma protein known as corticosteroid-binding globulin (CBG). As anticipated from primary structure comparisons of CBG and alpha 1-proteinase inhibitor (A1-PI), CBG acts as a substrate for neutrophil elastase. However, unlike A1-PI, CBG does not alter the activity of this enzyme, but is cleaved by it at a single location close to its carboxy-terminus, and this reduces its molecular size by 5 kDa with the concomitant release of more than 80% of CBG-bound cortisol. Three small molecular size fragments are detected after elastase cleavage, and carbohydrate analysis of these fragments suggests that they represent the same polypeptide fragment which has been differentially glycosylated. To assess the biological significance of these observations, CBG was incubated with either mononuclear cells or granulocytes obtained from patients with acute inflammation (sepsis) and from a normal volunteer. Only granulocytes from septic patients reduced the mol wt of CBG by about 5 kDa and destroyed its steroid-binding activity. Preincubation with A1-PI prevented this, which demonstrates that neutrophil elastase plays a key role in this event. These results suggest a physiological role for CBG in the delivery of cortisol to sites of inflammation.