I GFs are pleiotrophic mitogens for porcine smooth muscle cells (pSMC) in culture. The effects of IGFs on cells are modulated by various insulin-like growth factor-binding proteins (IGFBP). IGFBP-5 is synthesized by pSMC and binds to the extracellular matrix. However, IGFBP-5 is also secreted into conditioned medium of cultured cells and is cleaved into fragments by a concomitantly produced protease. These fragments have reduced affinity for the IGFs and cleavage makes it difficult to assess the role of intact IGFBP-5. To study the consequence of accumulation of intact IGFBP-5 in medium, we determined the cleavage site in IGFBP-5 and prepared a protease resistant mutant. Amino acid sequencing of purified IGFBP-5 fragments suggested Arg138-Arg139 as the primary cleavage site. Arg138-Arg139-->Asn138-Asn139 mutations were introduced to create protease-resistant IGFBP-5, which has the same affinity for IGF-I as the native protein. This mutant IGFBP-5 remained intact even after 24 h of incubation and it inhibited several IGF-I actions when added to pSMC culture medium. The mutant IGFBP-5 (500 ng/ml) decreased IGF-I stimulated cellular DNA synthesis by 84%, protein synthesis by 77%, and it inhibited IGF-I stimulated migration of pSMC by 77%. It also inhibited IGF-I stimulation of IRS-1 phosphorylation. In contrast, the same amount of native IGFBP-5 did not inhibit IGF-I actions. The significance of inhibitory effects of the protease resistant IGFBP-5 was further demonstrated in pSMC transfected with mutant or native IGFBP-5 cDNAs. The mutant IGFBP-5 accumulated in culture medium of transfected cells, while native IGFBP-5 was degraded into fragments, PSMC overexpressing the mutant IGFBP-5 also responded poorly to IGF-I compared with mock transfected cells. IGF-I (5 ng/ml) increased [35S]methionine incorporation into control cells by 36% above the basal level, but it did not significantly change (4%) in pSMC cultures that were producing the mutant IGFBP-5. In conclusion, the accumulation of protease-resistant IGFBP-5 in the medium was inhibitory to IGF-I actions on pSMC. This suggests that proteolysis can prevent IGFBP-5 from acting as an inhibitor of IGF-I-stimulated effects and that it serves as an important mechanism for regulating cellular responsiveness to IGF-I.