Objective: Collagenase-3, a matrix metalloproteinase (MMP-13) that can degrade collagen II and aggrecan, is produced by osteoarthritic (OA) chondrocytes and may contribute to matrix destruction in this disease. Our laboratory has previously identified a specific endocytotic receptor for collagenase-3 on osteoblastic and fibroblastic cells, which couples with the low-density lipoprotein receptor-related protein (LRP1) to mediate the internalization and degradation of this enzyme. We hypothesized that the activity of this receptor system is reduced in OA chondrocytes which may lead to increased local extracellular levels of collagenase-3 and increased destruction of the cartilage matrix at pericellular sites. Methods: Human chondrocytes and synoviocytes were obtained from OA knees at the time of joint replacement surgery and from non-arthritic control specimens following autopsy or surgery. Enzyme-linked immunosorbant assay (ELISA) was used to measure collagenase-3 secreted from primary cultures. Iodinated collagenase-3 was used to analyze the cell-surface binding, internalization and intracellular degradation of collagenase-3. Reverse-transcriptase polymerase chain reaction was used to confirm chondrocyte phenotype and the expression of collagenase-3 and LRP1 mRNAs. Results: OA chondrocytes and synoviocytes demonstrated significantly reduced (75-77%) binding of recombinant 125I collagenase-3. Internalization and degradation of the ligand was also significantly reduced (64-72%) in OA cells. Collagenase-3 removal was inhibited by the LRP1 receptor-associated protein (RAP). Conclusion: These results suggest a mechanism whereby impaired receptor-mediated removal of collagenase-3 in OA chondrocytes may lead to enhanced local degradation of the cartilage matrix. This work also implicates an LRP family member in endocytotic receptor-mediated collagenase-3 processing and suggests a novel therapeutic target for OA.