The leptin receptor (ObR) exists in multiple isoforms. In rodents, a soluble isoform is generated by alternative splicing; but in humans, there is no mRNA encoding soluble receptor (leptin binding protein). We investigated the hypothesis that human leptin binding protein can be generated by proteolytic cleavage of membrane-anchored leptin receptors (ObRb and ObRa). Leptin binding protein of similar size to that previously detected in human serum was detected by HPLC in medium of cells transfected with ObRa. ObRa exhibited higher expression at the cell surface than ObRb and generated greater levels of leptin binding protein. Ligand-mediated immunofunctional and immunofluorometric assays revealed that the leptin binding protein in medium bound both leptin and an ObR-specific antibody and that the level of leptin binding protein correlated with receptor expression at the cell surface. Phorbol 12-myristate-13-acetate and N-ethylmaleimide increased the accumulation of leptin binding protein, an indication that the production of leptin binding protein was up-regulated by PKC and sulfhydryl group activation. The protease inhibitors, TNFalpha protease inhibitor 1 and Immunex compound 2, could inhibit the production of leptin binding protein, indicating that the enzyme responsible for leptin binding protein cleavage belongs to the metalloprotease family. In conclusion, human leptin binding protein is generated by proteolytic cleavage of membrane-anchored leptin receptor by a metalloprotease.