Monolayer and spinner cultured rabbit articular chondrocytes released into the medium latent metal-dependent enzyme with activity against bovine proteoglycan. Pretreatment of medium with p-aminophenylmercuric acetate or trypsin followed by soybean trypsin inhibitor significantly increased enzyme activity. The monolayer-cultured chondrocytes released more of this activity than spinner cultures. The neutral proteoglycanase activity increased with medium concentration and incubation time. Like the human cartilage proteoglycanase, its pH optimum on proteoglycan subunit was 7.25. Gel filtration on BioGel P-30 indicated that the proteoglycanase occurred in two molecular weight forms: 20 000--30 000 and 13 000. The latent enzyme was about 30 000--40 000. The metal-chelators, o-phenanthroline (5 mM) and EDTA (10 mM) inhibited the activated proteoglycanase almost completely, but trypsin and chymotrypsin inhibitors had little effect. The cultured chondrocytes also released into the media a heat-labile inhibitor against the proteoglycanase. The inhibitory activity was present in the nonactivated media and eluted on Sephadex G-100 chiefly at a position corresponding to molecular weights of 10 000--13 000.