Cleavage of C3 by purified leukocyte enzymes and crude extracts of human polymorphonuclear leukocyte (PMN) granules has been reported. We demonstrate that viable PMN mediate the cleavage of erythrocyte-bound C3b and C3bi via cell-associated proteases. Greater than 50% of 125IC3(x) was released from EAC43bix during a 5-min incubation with viable PMN at 37 degrees C. More than a 30-min incubation was required for substantial release from EAC43bx. Culture fluids from PMN suspensions had limited cleaving ability; cleavage of cell-bound C3bx and C3bix was only partially reduced when PMN were preincubated with high levels of soluble C3 which completely blocked EAC43b rosettes. Thus, cell-to-cell contact between opsonized erythrocytes and viable PMN with surface-associated proteases are responsible for cleavage of these opsonic sites. The effect of defined protease inhibitors on PMN cleaving activity as well as on purified leukocyte elastase was examined. Phenylmethylsulfonyl fluoride (PMSF) and the leukocyte elastase inhibitor, methoxy-succinate-alanine-alanine-valine-chloromethyl ketone (MeO) each inhibited cleavage of C3b by 90% and C3bi by 60%. In contrast, the cathepsin-G inhibitor, benzyloxy-carbonyl-glycine-leucine-phenylalanine-chloromethyl ketone (Z) inhibited C3b and C3bi cleavage by less than 20 and less than 5%, respectively. Ethylenediaminetetra-acetate (EDTA), which had a minimal effect on soluble leukocyte elastase, also inhibited PMN-related release. Thus, elastase appeared to be the principle but not the only enzyme responsible for cleavage of C3b and C3bi. PMSF and MeO had a minimal effect on the activity of purified C3bINA (Factor I); and PMN-mediated release of C3b fragments was not inhibited by anti-Factor I and anti-beta 1H (Factor H) IgG and Fab. Thus, these control proteins are not involved in the PMN-mediated cleavage under study. PMN-mediated cleavage of C3b was also inhibited when PMSF- and MeO-treated PMN were washed to remove the fluid phase phase protease inhibitor before adding EAC43b. This suggests that proteases localized in the PMN membrane, prior to the adherence of EAC43b, are responsible for C3b cleavage. Normal human serum was effective in blocking PMN-mediated release activity, while serum from alpha 1 antitrypsin-deficient patients was minimally effective. This suggests a mechanism for the in vivo regulation of PMN-mediated release of C3b and C3bi from opsonized particles by the natural plasma protease inhibitors.