It is recognized that insulin-like growth factors (IGFs) are bound to specific high-affinity insulin-like growth factor-binding proteins (IGFBPs). The role of IGFBPs in bone metabolism is not well established. The effect of recombinant human [Cys281]IGFBP-2 ([Cys281]rhIGFBP-2) on bone formation in 21-day-old fetal rat calvariae was investigated. [Cys281]rhIGFBP-2 was expressed in and purified from conditioned medium of a clonal Chinese hamster ovary cell line. IGF-I-stimulated cell proliferation was inhibited dose dependently by [Cys281]rhIGFBP-2, with half-maximal inhibition observed at 2 x 10(-8) M. Suppression of the IGF-I-stimulated DNA synthesis was observed at an apparent dose ratio of 1:10. [Cys281]rhIGFBP-2 (10(-6) M) also inhibited the basal incorporation of [3H]thymidine into DNA by up to 45%. Insulin-stimulated cell proliferation was not affected in the presence of the binding protein. In addition, [Cys281]rhIGFBP-2 inhibited bone collagen synthesis under basal and IGF-I-stimulated conditions. In contrast, [Cys281]rhIGFBP-2 did not alter the parathyroid hormone-stimulated bone cell proliferation rate. In conclusion, binding of hIGF-I to rhIGFBP-2 results in an inhibition of the actions of free IGF-I on bone cell replication and matrix synthesis. Parathyroid hormone-stimulated cell proliferation is not mediated by an increase in free IGFs.