Kallikrein-related peptidase 2 (KLK2) degrades insulin-like growth factor (IGF)-binding protein-3 (IGFBP-3) in vitro. IGFBP-3 forms complexes with IGFs, preventing them from binding to their receptors and stimulating cell proliferation and survival. IGF-independent actions have also been described for IGFBP-3. The degradation of IGFBP-3 by KLK2 or other proteases in the prostate may promote the growth of prostate cancer. We studied IGFBP-3 degradation by immunoblotting and two specific immunoassays, one recognizing only native non-fragmented IGFBP-3 and the other one recognizing both intact and proteolytically cleaved IGFBP-3. Peptides were used to inhibit the enzyme activity of KLK2 and cleavage sites in IGFBP-3 were identified by mass spectrometry. KLK2 proteolyzed IGFBP-3 into several small fragments, mostly after Arg residues, in keeping with the trypsin-like activity of KLK2. The fragmentation could be inhibited by KLK2-inhibiting peptides in a dose-dependent fashion. As degradation of IGFBP-3 could lead to a more aggressive cancer phenotype, inhibition of KLK2 activity might be useful for treatment of prostate cancer and other diseases associated with increased KLK2 activity.