Cartilage degradation, a hallmark of rheumatoid arthritis, is attributed to serine and metalloproteases secreted by neutrophils, synovial lining cells, macrophages, and chondrocytes. A large proportion of synovial fluid lymphocytes contains the granule-associated serine proteases granzymes A and B. We report that lysates of IL-2-stimulated lymphocytes contain an enzymatic activity (ECMase; cartilage extracellular matrix 35S release assay; extracellular matrix degrading activity) that solubilizes matrix synthesized by chondrocyte monolayers. ECMase activity is inactivated by the serine protease inhibitor diisopropylfluorophosphate, is stored in dense granules and cleaves aggrecan proteoglycans but not free glycosaminoglycans, hyaluronic acid, or type II collagen. ECMase is mediated by a cationic protein with biochemical properties identical to granzyme B, inasmuch as it preferentially hydrolyzes the substrate Boc-Ala-Ala-Asp-SBzl, immunochemically cross-reacts with an antibody that binds to a conserved amino-terminal region of lymphoid-myeloid serine proteases, and has amino-terminal sequence identity with human Q31 granzyme B. Using an agarose gel electrophoresis technique to assess cleavage of the rat sarcoma aggrecan, the catalytic efficiency of granzyme B for the digestion of aggrecan (catalytic efficiency = 1.7 x 10(7) M-1 s-1) was 425-fold faster than the catalytic efficiency reported for human stromelysin-1 at pH 7.5 (catalytic efficiency 4000 M-1 s-1) and 3200-fold faster than granzyme A. Based on these observations, we propose that granzyme B, secreted from cytotoxic lymphocytes within the rheumatoid joint, may contribute to cartilage loss by degrading resident aggrecan.