A method was developed for generating soluble, active "aggrecanase" in conditioned media from interleukin-1-stimulated bovine nasal cartilage cultures. Using bovine nasal cartilage conditioned media as a source of the aggrecanase enzyme, an enzymatic assay was established employing purified aggrecan monomers as a substrate and monitoring specific aggrecanase-mediated cleavage products by Western analysis using the monoclonal antibody, BC-3 (which recognizes the new N terminus, ARGS, on fragments produced by cleavage between amino acid residues Glu 373 and Ala 374 ). Using this assay we have characterized cartilage aggrecanase with respect to assay kinetics, pH and salt optima, heat sensitivity, and stability upon storage. Aggrecanase activity was inhibited by the metalloprotease inhibitor, EDTA, while a panel of inhibitors of serine, cysteine, and aspartic proteinases had no effect, suggesting that aggrecanase is a metalloproteinase. Sensitivity to known matrix metalloproteinase inhibitors as well as to the endogenous tissue inhibitor of metalloproteinases, TIMP-1, further support the notion that aggrecanase is a metalloproteinase potentially related to the ADAM family or MMP family of proteases previously implicated in the catabolism of the extracellular matrix.