Control of functions mediated by the third component of complement (C3) depends on the rate of generation and degradation of biologically active C3 fragments. To evaluate the mechanisms of degradation of active C3 fragments, the role of the control protein C3b/C4b inactivator (factor I) was investigated under conditions approximating those found in vivo, i.e. in the presence of plasma. The breakdown of human erythrocyte-bound C3bi molecules in serum or plasma was mediated only by factor I, since factor I-deficient or -depleted plasma was inactive until reconstituted with highly purified factor I. The rate of cleavage of C3bi bound to human erythrocytes by purified factor I was not affected by the presence or absence of beta 1H (factor H). The released breakdown product of C3bi has been shown to be C3c antigenically and on polyacrylamide gel electrophoresis in the presence of sodium dodecyl sulfate. Two different monospecific antibodies to the human C3b receptor totally abrogated factor I-mediated cleavage of cell-bound C3bi, suggesting that the C3b receptor (but not factor H) is required as an obligate cofactor. The rate of this C3b receptor-dependent, factor I-mediated cleavage of bound C3bi is strongly regulated by the surface to which C3bi is bound. Whereas C3bi bound to particulate nonactivators of the alternative complement pathway such as human erythrocytes is rapidly degraded by this mechanism, the rate of cleavage of C3bi bound to activators is significantly slower. These data suggest a physiologic role of C3b receptors in the degradation of biologically active C3 fragments deposited on host tissues. They also suggest that C3bi molecules on restricted surfaces are relatively stable and can thereby interact with complement C3 receptors in vivo.