1. An enzyme that degrades proteoglycan at neutral pH was extracted with 4 M-guanidine hydrochloride from the articular cartilage of rabbits with antigen-induced arthritis. 2. The enzyme had an apparent molecular weight on Ultrogel AcA 54 of about 8000 and was optimally active at pH 7.5 in Tris/HCl buffer containing 0.2 M-NaCl. The partially purified preparation was totally inhibited by 0.01 mM-N-acetyldialanylprolylvalylchloromethane, severely inhibited by 2 mM-phenylmethanesulphonyl fluoride and soya-bean trypsin inhibitor (200 microgram/ml) and slightly inhibited by 10 mM-EDTA. Marked inhibition was also obtained with a cytosolic fraction prepared from rabbit polymorphonuclear leucocytes. 3. All properties of the enzyme were virtually identical with those of an 'elastase-like' proteinase that was isolated from rabbit polymorphonuclear-leucocyte granules. 4. The results are consistent with the idea that cartilage proteoglycan degradation in acute joint inflammation is due at least partly to the diffusion into the cartilage of proteinases derived from synovial-fluid polymorphonuclear leucocytes.