The basic amino acid-specific proprotein convertase 5/6 (PC5/6) is an essential secretory protease, as knock-out mice die at birth and exhibit multiple homeotic transformation defects, including impaired bone morphogenesis and lung structure. Some of the observed defects were attributed to impaired processing of the TGFβ-like growth differentiating factor 11 precursor (proGdf11). In this work we present evidence that the latent TGFβ-binding proteins 2 and 3 (LTBP-2 and -3) inhibit the extracellular processing of proGdf11 by PC5/6A. This is partly due to the binding of LTBPs in the endoplasmic reticulum to the zymogen proPC5/6A, thus allowing the complex to exit the endoplasmic reticulum and be sequestered as an inactive zymogen in the extracellular matrix but not at the cell surface. This results in lower levels of PC5/6A in the media, without affecting those of PACE4, Furin, or a soluble form of PC7. The secreted soluble protease-specific activity of PC5/6A or a variant lacking the C-terminal Cys-rich domain (PC5/6-ΔCRD) is significantly decreased when co-expressed with LTBPs in cells. A similar enzymatic inhibition seems to apply to PACE4 and Furin. In situ hybridization analyses revealed extensive co-localization of PC5/6 and LTBP-3 mRNAs in mice at embryonic day 15.5 and post partum day 1. In conclusion, this is the first time that a zymogen of the proprotein convertases was shown to exit the endoplasmic reticulum in the presence of LTBPs, representing a potential novel mechanism for the regulation of PC5/6A activity, e.g. in tissues such as bone and lung where LTBP-3 and PC5/6 co-localize.