The CXC chemokine stromal cell-derived factor (SDF)-1 is produced constitutively in different tissues. It is the only known ligand for CXCR4, which is widely expressed in leukocytes and in some tissue cells, and acts as coreceptor for X4 HIV strains. Because of the general interest in the mechanisms that regulate the activity of constitutively expressed chemokines, we have studied the inactivation of SDF-1 in cells that bear CXCR4. Here we show that B lymphocytes, NK cells and, to a lesser extent, T lymphocytes inactivate SDF-1 by N-terminal processing. Inactivation is due to cathepsin G which is associated with the membrane of lymphocytes and rapidly cleaves off five N-terminal residues by acting on the Leu(5)-Ser(6) bond yielding SDF-1(6-67). Processing was observed with intact cells, cell membrane preparations and soluble cathepsin G obtained by extraction of the membranes with Triton X-100. Cathepsin G is released by neutrophils and monocytes and binds on the surface of lymphocytes by an apparently saturable process. Analysis of the product obtained, the time course and the sensitivity to inhibitors shows that cathepsin G is the only protease involved. Conversion of SDF-1 to SDF-1(6-67) was complete within minutes to 1-2 h depending on the enzyme source, and was abrogated by inhibitors of serine proteases and chymostatin. Diprotin A, an inhibitor of dipeptidyl peptidase IV, was without effect. Owing to its availability on the surface of SDF-1-responsive cells and its rapid effect, cathepsin G is likely to play a significant role in down-regulating SDF-1 activity.