Human pregnancy-associated plasma protein-A (PAPP-A) cleaves insulin-like growth factor (IGF) binding protein-4 (IGFBP-4), causing a dramatic reduction in its affinity for IGF-I and -II. Through this mechanism, PAPP-A is a regulator of IGF bioactivity in several systems, including the human ovary and the cardiovascular system. PAPP-A belongs to the metzincin superfamily of zinc metalloproteinases, and is the founding member of a fifth metzincin family, the pappalysins. Herein, we first determined that PAPP-A cleaves IGFBP-4 at a single site (Met-135/Lys-136), and we analysed the influence of ionic strength, pH and zinc ion concentration on the cleavage reaction. Secondly, we sought to delineate the role of substrate residues in PAPP-A-mediated cleavage by the construction and analysis of 30 IGFBP-4 mutants in which various residues were replaced by alanine, by the analysis of eight mutants of IGFBP-5 (found recently to be a second PAPP-A substrate), and by cleavage analysis of synthetic peptides derived from IGFBP-4. Our data reveal a complex mode of substrate recognition and/or binding, pointing at important roles for several basic residues located up to 16 residues N-terminal to the scissile bond. An unexpected parallel can be drawn with an intracellular enzyme, the mitochondrial processing peptidase, that may help us to understand properties of the pappalysins. Further, proteinase-resistant variants of IGFBP-4 and −5, presented here, will be useful tools for the study of proteolysis in cell-based systems, and our finding that a synthetic peptide can be cleaved by PAPP-A provides the basis for development of quantitative assays for the investigation of PAPP-A enzyme kinetics.