Rat mast cell protease 1 (RMCP-1) is a secretory granule serine protease (chymase) that is recovered in vivo in a macromolecular complex with heparin proteoglycan (PG). We have previously shown that heparin activates RMCP-1 and that RMCP-1, when bound to heparin PG, is largely resistant to inhibition by a variety of macromolecular protease inhibitors. In the search for alternative mechanisms in the regulation of RMCP-1 activity, we hypothesized that heparin antagonists, by interfering with the RMCP-1/heparin PG interaction, might influence the activity of heparin-bound mast cell chymase. In the present study, lactoferrin (LF), a heparin-binding protein, was assessed for RMCP-1 inhibiting activity. LF proved to decrease the activity of heparin PG-associated RMCP-1, although a portion of the enzyme activity was resistant to regulation. The mechanism of regulation was shown to involve the displacement of RMCP-1 from heparin PG, and LF caused an approx. 6-fold increase in the apparent Km of the RMCP-1-heparin PG complex for the chromogenic substrate S-2586. The interaction of LF with heparin was characterized. Pig mucosal heparin and endogenous heparin PG were equally effective in binding LF, whereas heparan sulphate bound with lower affinity. None of dermatan sulphate, chondroitin sulphate or hyaluronan were effective in binding LF. Further, the 6-O-, 2-O- and N-sulphate groups in heparin were of approximately equal importance for binding. Octasaccharides were the smallest heparin oligosaccharides showing significant binding to LF.