A metalloproteinase, 'proteoglycanase', that degrades proteoglycan and insoluble type IV collagen as well as casein was purified to homogeneity from rabbit bone culture medium. The major form of this proteinase had a final specific activity of 2400 micrograms of casein degraded/min per mg of enzyme protein, and Mr 24 500 by sodium dodecyl sulphate/polyacrylamide-gel electrophoresis or 12 500 by gel-filtration chromatography. It was active over the pH range 5.0-9.0 against a number of substrates, and the rates of degradation were almost constant over the whole of this range. The products generated from proteoglycan-aggregate degradation by this enzyme indicated cleavage at multiple chondroitin sulphate-binding sites along the protein core. In a new assay to detect degradation of insoluble type IV collagen, the proteoglycanase generated large fragments, probably by cleavage in the non-helical regions. The enzyme degraded laminin, fibronectin and procollagen, removing the extension peptides of the last-mentioned. It also cleaved the 'weak region' of the type III collagen helix in a manner analogous to trypsin. The synthetic substrate 2,4-dinitrophenyl-Pro-Leu-Gly-Ile-Ala-Gly-Arg-NH2 was cleaved exclusively at the Gly-Ile bond. The proteoglycanase was inhibited by tissue inhibitors of metalloproteinases from rabbit bone culture medium, human amniotic fluid and bovine nasal-cartilage extracts, forming essentially irreversible inactive complexes. The importance of this tissue-derived enzyme, with such a wide-ranging degradative capacity, in normal and pathological connective-tissue matrix degradation is discussed.