The N-terminal domain is conserved in all members of the IGF-binding protein superfamily. Most recently, studies have demonstrated the importance of an IGF-binding protein N-terminal hydrophobic pocket for IGF binding. To examine more critically the amino acids important for IGF binding within the full-length IGF-binding protein-3 protein while minimizing changes in the tertiary structure, we targeted residues I56, L80, and L81 within the proposed hydrophobic pocket for mutation. With a single change at these sites to the nonconserved glycine there was a notable decrease in binding. A greater reduction was seen when both L80 and L81 were substituted with glycine, and complete loss of affinity for IGF-I and IGF-II occurred when all three targeted amino acids were changed to glycine. Furthermore, the ability of the IGF-binding protein-3 mutants to inhibit IGF-I-stimulated phosphorylation of its receptor was a reflection of their affinity for IGF, with the lowest affinity mutants having the least inhibitory effect. These studies, thus, support the hypothesis that an N-terminal hydrophobic pocket is the primary site of high affinity binding of IGF to IGF-binding protein-3. The mutants provide a tool for future studies directed at IGF-dependent and IGF-independent actions of IGF-binding protein-3.