Insulin-like growth factor (IGF)-I and IGF-II are expressed at biologically effective levels by bone cells. Their stability and activity are modulated by coexpression of IGF binding proteins (IGFBPs). Secreted IGFBPs may partition to soluble, cell-associated, and matrix-bound compartments. Extracellular localization may sequester, store, or present IGFs to appropriate receptors. Of the six IGFBPs known, rat osteoblasts synthesize all but IGFBP-1. Of these, IGFBP-3, -4, and -5 mRNAs are induced by an increase in cAMP. Little is known about extracellular IGFBP localization in bone and nothing about IGFBP expression by nonosteoblastic periosteal bone cells. We compared basal IGFBP expression in periosteal and osteoblast bone cell cultures and assessed the effects of changes in cAMP-dependent protein kinase A or protein kinase C. Basal IGFBP gene expression differed principally in that more IGFBP-2 and -5 occurred in osteoblast cultures, and more IGFBP-3 and -6 occurred in periosteal cultures. An increase in cAMP enhanced IGFBP-3, -4, and -5 mRNAand accordingly increased soluble IGFBP-3, -4, and -5 and matrix-bound IGFBP-3 and -5 in both bone cell populations. In contrast, protein kinase C activators suppressed IGFBP-5 mRNA, and its basal protein levels remained very low. We also detected low Mr bands reactive with antisera to IGFBP-2, -3, and -5, suggesting proteolytic processing or degradation. Our studies reveal that various bone cell populations secrete and bind IGFBPs in selective ways. Importantly, inhibitory IGFBP-4 does not significantly accumulate in cell-associated compartments, even though its secretion is enhanced by cAMP. Because IGFBPs bind IGFs less tightly in cell-bound compartments, they may prolong anabolic effects by agents that increase bone cell cAMP.