Partial degradation of the biologically-active major fragment of the third complement component (C3b) to C3bi is catalysed by the endopeptidase C3b inactivator (I) and its co-factor, beta 1H globulin (H). Complete degradation to the fragments C3c and C3d requires an additional protease, which can be simulated in vitro by trypsin. This study was designed to identify the in vivo correlate of trypsin. Purified and 125I-labelled C3b bound to sheep erythrocytes was used as substrate. Release of label into the supernate served as an index of proteolysis. The chain structure of the peptides in the supernate or remaining bound to the erythrocytes was assessed by SDS polyacrylamide gel electrophoresis. Significant cleavage of cell-bound C3b was obtained by treatment with I, H and extracts from human peripheral blood leucocyte azurophil granules. Purified elastase also removed label in the presence of I and H. The peptide remaining on the cell had the characteristic 33K molecular weight of C3d. The activity of elastase in cleaving was blocked by alpha-1-anti-trypsin, the chloromethyl ketone, MeO-Suc-Ala-Pro-Val-Ch2Cl and by rabbit antibody to elastase. Thus, elastase purified from azurophil granules of human polymorphonuclear neutrophils (PMN) is a potent catalyst of the cleavage of C3bi to C3c- and C3d-like fragments and may contribute in vivo to the control of complement-mediated inflammation.