Bone morphogenetic protein-1 (BMP-1) and the tolloid-like metalloproteinases control several aspects of embryonic development and tissue repair. Unlike other proteinases whose activities are regulated mainly by endogenous inhibitors, regulation of BMP-1/tolloid-like proteinases relies mostly on proteins that stimulate activity. Among these, procollagen C-proteinase enhancers (PCPEs) markedly increase BMP-1/tolloid-like proteinase activity on fibrillar procollagens, in a substrate-specific manner. Here, we performed a detailed quantitative study of the binding of PCPE-1 and of its minimal active fragment (CUB1-CUB2) to three regions of the procollagen III molecule: the triple helix, the C-telopeptide, and the C-propeptide. Contrary to results described elsewhere, we found the PCPE-1-binding sites to be located exclusively in the C-propeptide region. In addition, binding and enhancing activities were found to be independent of the glycosylation state of the C-propeptide. These data exclude previously proposed mechanisms for the action of PCPEs and also suggest new mechanisms to explain how these proteins can stimulate BMP-1/tolloid-like proteinases by up to 20-fold.