We investigated the interaction of the human plasma proteinase inhibitor heparin cofactor II (HC) with human neutrophil elastase and cathepsin G in order to examine 1) proteinase inhibition by HC, 2) inactivation of HC, and 3) the effect of glycosaminoglycans on inhibition and inactivation. We found that HC inhibited cathepsin G, but not elastase, with a rate constant of 6.0 x 10(6) M-1 min-1. Inhibition was stable, with a dissociation rate constant of 1.0 x 10(-3) min-1. Heparin and dermatan sulfate diminished inhibition slightly. Both neutrophil elastase and cathepsin G at catalytic concentrations destroyed the thrombin inhibition activity of HC. Inactivation was accompanied by a dramatic increase in heat stability, as occurs with other serine proteinase inhibitors. Proteolysis of HC (Mr 66,000) produced a species (Mr 58,000) that retained thrombin inhibition activity, and an inactive species of Mr 48,000. Amino acid sequence analysis led to the conclusion that both neutrophil elastase and cathepsin G cleave HC at Ile66, which does not affect HC activity, and at Val439, near the reactive site Leu444, which inactivates HC. Since cathepsin G is inhibited by HC and also inactivates HC, we conclude that cathepsin G participates in both reactions simultaneously so that small amounts of cathepsin G can inactivate a molar excess of HC. High concentrations of heparin and dermatan sulfate accelerated inactivation of HC by neutrophil proteinases, with heparin having a greater effect. Heparin and dermatan sulfate appeared to alter the pattern, and not just the rate, of proteolysis of HC. We conclude that while HC is an effective inhibitor of cathepsin G, it can be proteolyzed by neutrophil proteinases to generate first an active inhibitor and then an inactive molecule. This two-step mechanism might be important in the generation of chemotactic activity from the amino-terminal region of HC.