We have previously shown that the rat osteoblastic cell line UMR 106-01 responds to parathyroid hormone treatment by secreting interstitial collagenase. Secreted collagenase reaches a maximal concentration 12-24 h after parathyroid hormone stimulation, but then declines to undetectable levels by 96 h. Neither spontaneous nor cell-mediated extracellular degradation could account for this disappearance, since the enzyme maintained stability in both fresh and conditioned media. Instead, a cell-mediated binding mechanism was suggested by the rapid and saturable removal of exogenous purified rat collagenase at 37 degrees C. Binding studies using 125I-collagenase at 4 degrees C indicated a saturable receptor of a single class and 12,000 receptors per cell (Kd = 5 x 10(-9) M). A time course revealed specific receptor-mediated binding within 10 min and equilibrium by 60 min, while dissociation experiments further demonstrated reversibility. The kinetics of 125I-collagenase binding are characterized by the association (k1 = 4 x 10(6) M-1 min-1) and dissociation (k-1 = 2 x 10(-3) min-1) rate constants. The receptor was shown to be specific for rat collagenase since a host of related and unrelated proteins failed to compete for binding. Internalization studies revealed maximal intracellular accumulation at 30 min and complete degradation by 90 min, suggesting this receptor functions in these osteoblastic cells to eliminate extracellular collagenase.