The receptor for the type 1 insulin-like growth factor (IGF-I) has been implicated in cellular transformation and the acquisition of an invasive/metastatic phenotype in various tumors. Following ligand binding, the IGF-I receptor is internalized, and the receptor⅐ligand complex dissociates as the ligand is degraded by endosomal proteinases. In the present study we show that the inhibition of endosomal IGF-I-degrading enzymes in human breast and murine lung carcinoma cells by the cysteine proteinase inhibitors, E-64 and CA074-methyl ester, profoundly altered receptor trafficking and signaling. In treated cells, intracellular ligand degradation was blocked, and although the receptor and two substrates, Shc and Insulin receptor substrate, were hyperphosphorylated on tyrosine, IGF-I-induced DNA synthesis, anchorage-independent growth, and matrix metalloproteinase synthesis were inhibited. The results suggest that ligand processing by endosomal proteinases is a key step in receptor signaling and function and a potential target for therapy.The receptor for the type 1 insulin like growth factor (IGF-IR) 1 and its ligands IGF-I and IGF-II regulate normal somatic growth during embryogenesis and post-natal development (1). However, IGF-I and its receptor have also been implicated in the development of several human malignancies such as glioand neuroblastomas, breast, lung, colon, and prostate carcinomas (2). Furthermore, IGF-I has been shown to regulate the induction and maintenance of the transformed phenotype and the acquisition of the invasive/metastatic phenotype (3, 4).IGF-I binding to its cell surface receptor activates intrinsic tyrosine kinase activity generating docking sites for src homology or phosphotyrosine binding domain-containing proteins and leading to activation of downstream signaling cascades (5). This is coupled to ligand-mediated internalization of the receptor leading initially to attenuation of the IGF-I response through down-regulation of plasma membrane receptor levels and subsequently to receptor recycling to the cell surface (6). These processes of receptor internalization and recycling have long been regarded as key events in the regulation of receptor activity (7). In the acidic milieu of the endosomes, ligand dissociation from its receptor is thought to be required for receptor recycling to the cell surface, and abrogation of ligand dissociation leads to the intraendosomal accumulation of ligand⅐receptor complexes (8). In the case of insulin, ligandreceptor dissociation at acidic pH values is coupled to intraendosomal proteolysis by an as yet undefined proteinase (9). For other internalized ligands such as glucagon or epidermal growth factor (10, 11), the cysteine proteinase cathepsin B has been implicated in endosomal ligand degradation. These studies define a tight coupling between receptor-ligand internalization, ligand dissociation and proteolysis, and receptor trafficking in the endosomal/lysosomal compartments.Previously one of our laboratories reported that treatment of murine Lewis l...