Porcine aortic smooth muscle cells secrete two forms of insulin-like growth factor (IGF) binding proteins (IGFBP-2 and -4), and both forms have been shown to modulate IGF-I actions in this cell type. Recently, we showed that IGFBP-4 inhibited IGF-I action and that the cells produced a protease that cleaved IGFBP-4 into non-IGF binding fragments. After the cleavage of IGFBP-4, the cellular DNA synthesis response to IGF-I was enhanced. This study reports that these cells also secrete a protease for IGFBP-2. Like the IGFBP-4 protease, this protease is also secreted constitutively, but unlike the IGFBP-4 protease, its secretion is enhanced if the cells are serum-deprived for 24 hours before the collection of conditioned medium. The protease cleaved IGFBP-2 into 25- and 16-kD fragments, which had reduced IGF-I binding activity. Protease activity was enhanced by coincubation with IGF-I or IGF-II, and IGF-II was more potent than IGF-I. The protease is a serine protease, since its activity can be inhibited by 3,4-dichloroisocoumarin and aprotinin. It is also inhibited by EDTA, and its activity can be restored with calcium but not zinc. The heparin-binding serpins, specifically, heparin cofactor II and antithrombin III, are inhibitory. Heparin alone also had activity, and the combination of antithrombin III plus heparin caused complete inhibition. The conditioned medium also contained proteolytic activities for IGFBP-4 and -5 but it did not cleave IGFBP-1 and -3.(ABSTRACT TRUNCATED AT 250 WORDS)