Partial proteolysis of insulin-like growth factor-binding protein-3 (IGFBP-3) lowers its affinity for IGFs. Presumably, this leads to destabilization of the ternary IGF-IGFBP-3-acid-labile subunit complex in the circulation and an increased bioavailability of IGFs. We investigated the effect of GH on IGFBP-3 proteolysis by comparing serum from normal mice and GH-deficient dwarf mice. While normal mouse serum degraded 125I-IGFBP-3, this activity declined with age. In contrast, serum from dwarf mice displayed strong proteolytic activity at all ages tested (up to 10 weeks). In dwarf mice of 4 weeks and older, this activity could not be inhibited by EDTA and 1,10-phenanthroline, indicating the presence of a divalent cation-independent protease. Prolonged treatment with GH (4 weeks) did not decrease the overall potency of the serum to degrade IGFBP-3, but partially restored the ability of EDTA to inhibit IGFBP-3 protease activity. GH deficiency therefore appears to induce a new kind of IGFBP-3 protease. Similarly, serum from hypophysectomized rats displayed enhanced IGFBP-3 protease activity compared with control rat serum. These results suggest that a protease induced under conditions of severe GH deficiency may contribute to making IGFs optimally available to the tissues.