The growth potentiating effects of the insulin-like growth factor (IGF)-I and IGF-II are modulated by a family of six insulin-like growth factor binding proteins (IGFBPs). Despite the similarity in amino acid sequences of the IGFBPs, their effects on the growth of bone cells differ. Studies on the molecular mechanisms for IGFBP-4 actions revealed that coincubation of bone cells with IGFBP-4 and 125I-IGF-I or 125I-IGF-II decreased the binding of both of these ligands in a dose-dependent manner. In addition, IGFBP-4 decreased the binding of IGF-I tracer to purified type I IGF receptor. These data in conjunction with data showing that IGFBP-4 had no effect on cell proliferation induced by analogs of IGF-I or IGF-II, which exhibited > 100-fold reduced affinity for binding to IGFBP-4 suggest that IGFBP-4 may inhibit IGF action by preventing the binding of ligand to its membrane receptor. In contrast to IGFBP-4, IGFBP-5 treatment increased the binding of IGF tracer to bone cells but did not increase the binding of 125I-IGF-I to type I IGF receptor. Studies on the mechanism by which IGFBP-5 increased the binding of 125I-IGF tracer to bone cells suggest that IGFBP-5 could facilitate IGF binding by a mechanism in which IGFBP-5 has cell surface binding sites independent of IGF receptors. These data in conjunction with the findings that IGFBP-5 potentiated cell proliferation even in the presence of those same IGF analogs that exhibited > 200-fold reduced affinity for binding to IGFBP-5, suggest that IGFBP-5 may in part stimulate bone cell proliferation by an IGF-independent mechanism involving IGFBP-5-specific cell surface binding sites.