Plasmin cleaves osteocalcin at a site within its carboxyl end, thus creating an N-midterminal 1-43 and a short C-terminal 44-49 peptides. The products of the cleavage were identified by matrix assisted laser desorption ionization time of flight mass spectrophotometry and by reversed phase high performance liquid chromatography followed by N-terminal sequence determination. When separated by sodium dodecyl sulfide-polyacrylamide gel electrophoresis in the presence of reducing agents, large (LF; N-midterminal) and a small molecular weight (SF; C-terminal) fragments can be identified. The major cleavage site involves arg43-arg44 amino acid residues, and the resulting 44-49 C-terminal fragment appears as a slow migrating band on native gels (SFnat). Elevated levels of calcium ion inhibit the plasmin-mediated lysis of osteocalcin. Plasmin-mediated cleavage of osteocalcin occurs both in solution and when bound to hydroxyapatite. Both osteocalcin cleavage products detach from the hydroxyapatite substrate. Diisopropyl fluorophosphate-inhibited plasmin does not displace osteocalcin from the hydroxyapatite surface. Previously, the C-terminal pentapeptide has been shown to be chemotactic for bone cells while bone particles lacking osteocalcin were resistant to bone resorption. We therefore hypothesize that the plasmin-mediated digestion of free and hydroxyapatite-bound osteocalcin could play a role in the regulation of bone remodeling.