The transplantation of PA-III rat prostate cancer cells onto rat skeleton produces osteoblastic metastases. Therefore w e studied the paracrine interactions between the PA-III cells and osteoblast-derived osteosarcoma cells (UMR 106 cells). A serine protease secreted by PA-III cells hydrolyzed IGF-binding protein-1 and IGF-binding protein-2 (IGFBP-1 and IGFBP-2) detected in the cell culture media (CM) of OMR 106 cells by western ligand blotting. The serine protease of PA-III cell CM was purified using a benzamidine affinity column. This protease was a protein of 45-50 kDa on polyacrylamide gel electrophoresis under non-reducing conditions but generated two protein bands under reducing conditions; a) one of 33-35 kDa possessing protease activity and b) another of 20-25 kDa which was proteinolytically inactive. Sequence analysis identified the amino acid sequence of the a-chain (20-25 kDa band) and of the b-chain (33-35 kDa band) of rat urokinase-type plasminogen activator molecule. Urokinase purified from PA-III cell CM hydrolyzed IGFBPs of UMR 106 cells and stimulated the proliferation of UMR 106 cells in serum-free cultures. Its protease activity was abolished by benzamidine and aprotinin. Its mitogenic activity for osteoblasts was inhibited by anti-IGF-I monoclonal antibody. Northern blot analysis documented the expression of the urokinase-type plasminogen activator gene in the mRNA extracted from PA-III cells. Urokinase expression was inhibited by dexamethasone. Therefore, we conclude that urokinase-type plasminogen activator stimulates osteoblasts via an IGF-I dependent mechanism. Hydrolysis of the IGFBOPs at the sites of PA-III cell-induced bone tumors account for an increased bioavailability of IGFs. This may facilitate the development and the growth of PA-III cell-induced bone tumor and can also mediate the subsequent local osteoblastic reaction.