Insulin-like growth factor binding protein-3 (IGFBP-3) binds IGF-I and IGF-II with high affinity, at least an order of magnitude higher than the affiniy of the IGFs for the IGFIR. It has been hypothesized that IGFBP-3 inhibits IGF binding to the IGFIR via a mechanism independent of its ability to sequester IGFs. In the present study, we examined the effects of IGFBP-3 and its proteolytic fragments on the initial events of the IGFIR signalling pathway. IGFBP-3 inhibited IGF-I-, IGF-II-, Des(1-3)IGF-I- and Long(R3)IGF-I-induced IGFIR phosphorylation in a dose-dependent manner at similar concentration range but not QAYL-induced IGFIR-P. The((1-97))IGFBP-3 fragment was able to inhibit only IGF-I-induced IGFIR-P. The((1-97))IGFBP-3 fragment but not intact IGFBP-3 inhibited insulin-induced IGFIR-P. Monolayer cross-linking with [(125)I]IGFBP-3 indicated that there is no direct interaction of IGFBP-3 with the IGFIR. This study demonstrates that the effect on the initial step of IGFIR signalling by IGFBP-3 is largely due to its ability to sequester IGF and the IGF analogues in the extracellular milieu and not the result of any interaction of IGFBP-3 with the IGFIR or a mechanism independent of its ability to bind IGFs.