The uncontrolled proteolytic activity in lung secretions during lung inflammatory diseases might be due to the resistance of membrane-bound proteases to inhibition. We have used a new fluorogenic neutrophil elastase substrate to measure the activity of free and membrane-bound human neutrophil elastase (HNE) in the presence of alpha1-protease inhibitor (alpha1-Pi), the main physiological inhibitor of neutrophil serine proteases in lung secretions. Fixed and unfixed neutrophils bore the same amounts of active HNE at their surface. However, the HNE bound to the surface of unfixed neutrophils was fully inhibited by stoichiometric amounts of alpha1-Pi, unlike that of fixed neutrophils. The rate of inhibition of HNE bound to the surface of unfixed neutrophils was the same as that of free HNE. In the presence of alpha1-Pi, membrane-bound elastase is almost entirely removed from the unfixed neutrophil membrane to form soluble irreversible complexes. This was confirmed by flow cytometry using an anti-HNE mAb. HNE activity rapidly reappeared at the surface of HNE-depleted cells when they were triggered with the calcium ionophore A23187, and this activity was fully inhibited by stoichiometric amounts of alpha1-Pi. HNE was not released from the cell surface by oxidized, inactive alpha1-Pi, showing that active inhibitor is required to interact with active protease from the cell surface. We conclude that HNE activity at the surface of human neutrophils is fully controlled by alpha1-Pi when the cells are in suspension. Pericellular proteolysis could be limited to zones of contact between neutrophils and subjacent protease substrates where natural inhibitors cannot penetrate.