Pregnancy-associated plasma protein-A (PAPP-A) has recently been identified as the proteinase responsible for cleavage of insulin-like growth factor binding protein (IGFBP)-4, an inhibitor of IGF action, in several biological fluids. Cleavage of IGFBP-4 by PAPP-A is believed to occur only in the presence of IGF. We here report that in addition to IGFBP-4, PAPP-A also cleaves IGFBP-5. Cleavage occurs at one site, between Ser-143 and Lys-144 of IGFBP-5. In the presence of IGF, IGFBP-4 and -5 are cleaved with similar rates by PAPP-A. Interestingly, cleavage of IGFBP-5 by PAPP-A does not require the presence of IGF, but is slightly inhibited by IGF. These findings have implications for the mechanism of proteolysis of IGFBP-4 by PAPP-A, suggesting that IGFBP-4 binds IGF, which then becomes a PAPP-A substrate. Using highly purified, recombinant proteins, we establish that (1) PAPP-A cleavage of IGFBP-4 can occur in the absence of IGF, although the rate of hydrolysis is very slow, and (2) IGF is unable to bind to PAPP-A. We thus conclude that IGF enhances proteolysis by binding to IGFBP-4, not by interaction with PAPP-A, which could not previously be ruled out.