Previous studies demonstrated that human decidua secretes a 34K insulin-like growth factor binding protein (34K IGF-BP) earlier designated placental protein 12, whereas placenta contains IGF receptors and IGF mRNA. We studied binding of [125I]IGF-I to paired placental and decidual tissues using competitive binding, gel filtration, RIA, and cross-linking techniques, and compared the binding characteristics of these two tissues which are located in close proximity in vivo. The effect of decidual cytosols on [125I]IGF-I binding to placental membranes also was studied. Consistent with previous data the dominating binding species in placental membranes were IGF receptors. In contrast, the binding of [125I]IGF-I to decidual membranes was mainly due to binding species with mol wts of 34K and 39K. The 34K IGF-BP was more readily detected in decidual cytosols than in decidual membranes and little was detected in placental cytosols. Purified 34K IGF-BP as well as decidual cytosols inhibited [125I]IGF-I binding to placental receptors. The inhibitory effect of decidual cytosol on IGF receptor binding was linearly correlated to the decidual content of 34K IGF-BP. The results suggest that the decidual 34K IGF-BP might act as a local modulator of the IGF action at the interface between the decidua and the placenta.