Insulin-like growth factor binding proteins (IGFBPs) regulate the cellular actions of the IGFs owing to their strong affinities, which are equal to or stronger than the affinity of the type 1 IGF receptor (IGF-IR), the mediator of IGF signal transduction. We recently found that IGFBP-3 modulates IGF-I binding to its receptor via a different mechanism possibly involving conformational alteration of the receptor. We have now investigated the effects of IGFBP-3 on the initial steps in the IGF signaling pathway. MCF-7 breast carcinoma cells were preincubated with increasing concentrations of IGFBP-3 and then stimulated with IGF-I, des(1-3)IGF-I, or [Q(3)A(4)Y(15)L(16)]-IGF-I, the latter two being IGF-I analogs with intact affinity for the type 1 IGF receptor, but weak or virtually no affinity for IGFBPs. Stimulation of autophosphorylation of the receptor and its tyrosine kinase activity was dose-dependently depressed. At 2.5 nM, IGFBP-3 provoked more than 50% inhibition of the stimulation induced by 3 nM des(1-3)IGF-1 and, at 10 nM, more than 80% inhibition. Similar results were obtained with [Q(3)A(4)Y(15)L(16)]-IGF-I. Cross-linking experiments using iodinated or unlabeled IGFBP-3 and anti-IGF-IR antibodies indicated that the inhibitory effects do not involve direct interaction between IGFBP-3 and IGF-IR. The inhibition appeared to be specific to IGFBP-3, because IGFBP-1 and IGFBP-5 at 10 nM had no significant effect. Also, inhibition was restricted to the IGF receptor, because IGFBP-3 failed to inhibit the tyrosine kinase activity of the insulin receptor stimulated by physiological concentrations of insulin. Our results provide the first demonstration that IGFBP-3 can specifically modulate the IGF-I signaling pathway independently of its IGF-I-binding ability. They also reveal a regulatory mechanism specific to the type 1 IGF receptor, with no effect on insulin receptor activation.