Interleukin-1 (IL-1) and insulin-like growth factor-I (IGF-I), which have opposing effects on matrix metabolism within articular cartilage, are thought to play prominent roles in the pathogenesis of osteoarthritis. To better understand the link between these anabolic (IGF-I) and catabolic (IL-1) stimuli, we examined exogenous IL-1 regulation of the IGF-I signaling system of articular chondrocytes (ACs). Equine ACs from non-arthritic stifle joints were expanded in monolayer culture, encapsulated for 10 days in alginate beads, and stimulated as high-density monolayers with recombinant equine IL-1beta (0, 1, 10 ng/ml) for 48 h. IL-1beta enhanced expression of IGF-IR levels, as determined by both [125I]-IGF-I binding studies and Western blotting, while reducing the concentration of endogenous IGF-I detected in conditioned media by radioimmunoassay. Western ligand blotting revealed that chondrocytes primarily secreted IGF binding proteins (IGFBPs) with molecular weights of 28-30 and 32-34 kDa, which were identified as IGFBPs 5 and 2, respectively, and that IL-1beta treatment diminished IGFBP-2, the prominent homolog in conditioned media. Northern blot analysis suggested IL-1beta regulation of IGF-I and, to some extent, IGF-IR was mediated by transcription; however, the cytokine did not affect IGFBP-2 expression. To test for evidence of proteolysis by matrix metalloproteinases (MMPs), additional cultures were co-incubated with inhibitors for MMPs 2/9, 3, and 8. IGFBP-2 suppression was partially reversed by gelatinase (MMP-2/9) inhibition. In summary, these findings further delineate the role of IL-1 as a key regulator of the IGF-I system within articular cartilage, demonstrating that regulation occurs through both direct (transcriptional) and indirect (proteolytic) mechanisms.