Insulin-like growth factor-binding protein 5 (IGFBP-5) is a secreted protein that binds to insulin-like growth factors (IGFs) and modulates IGF actions on cell proliferation, differentiation, survival, and motility. IGFBP-5 also regulates these cellular events through IGF-independent mechanisms. To elucidate the molecular mechanisms governing these diverse actions of IGFBP-5, we screened a human cDNA library by a yeast two-hybrid system using IGFBP-5 as bait and identified fibronectin (FN) as a potential IGFBP-5-interacting partner. The complex formation of IGFBP-5 and FN was established by glutathione S-transferase pull-down, solution, and solid phase binding assays using glutathione S-transferase-IGFBP-5 and native IGFBP-5 in vitro and by co-immunoprecipitation in vivo. Binding assay using deletion mutants indicated that the IGFBP-5 C domain binds to the 10(th) and 11(th) type I repeats of FN. IGFBP-5 potentiated IGF-I-induced cell migration in FN-null, but not in wildtype, mouse embryonic cells. When FN was reintroduced either as an adhesive substrate or in solution to the FN-null cells, the potentiating effect of IGFBP-5 on IGF-I-induced cell migration was abolished. Binding of IGFBP-5 to FN had no effect on the ability of IGFBP-5 to bind IGF-I, but it increased the proteolytic degradation of IGFBP-5. Inhibition of IGFBP-5 proteolysis restored the potentiating effect of IGFBP-5. These results suggest that FN and IGFBP-5 bind to each other, and this binding negatively regulates the ligand-dependent action of IGFBP-5 by triggering IGFBP-5 proteolysis.