Insulin-like growth factor-I (IGF-I) is an important anabolic factor for cartilage tissue and its action is, in part, regulated by IGF-binding proteins (IGFBPs). The object of this study was to investigate the effects of IGFBPs on IGF-I action and on binding of IGF-I to cells using a reproducible immortalized human chondrocyte culture model. Treatment of the C-28/I2 cells with IGF-I or des(1-3)IGF-I in serum-free medium stimulated cell proliferation in a dose-dependent manner. However, the effect of des(1-3)IGF-I was more potent, thereby suggesting that endogenously produced IGFBPs inhibited IGF action. The stimulatory effect of IGF-I was inhibited significantly by addition of IGFBP-3 but enhanced slightly by IGFBP-5. However, neither IGFBP-3 nor IGFBP-5 had an effect on basal cell growth. Binding of (125)I-labeled IGF-I to the cells was displaced by both IGFBP-3 and IGFBP-5, although higher concentrations of unlabeled IGFBP-5 were required to displace IGF-I to the same extent as IGFBP-3. Treatment of the cells with IGF-I increased the levels of IGFBP-5 protein measured by Western ligand blotting, and stimulated a corresponding increase in IGFBP-5 mRNA while increasing type II collagen mRNA. Our findings indicate that the balance between IGFBP-3 and IGFBP-5 influences IGF receptor binding and its action on chondrocyte proliferation, and may thereby modulate cartilage metabolism.