The hypothesis is widely held that proteolytic degradation of proteoglycans in the lower hypertrophic zone of the growth plate may be involved in the initiation of mineralization in the zone of provisional calcification. However, a neutral protease that is responsible for the degradation of proteoglycans in the growth plate has not been identified, isolated, and characterized. In the work reported here, neutral protease activity in the growth plate is demonstrated for the first time, and some of the properties of the enzyme are described. Proteoglycans subunits were prepared from bovine nasal cartilage and calf costal cartilage by equilibrium density-gradient centrifugation under dissociative conditions. The proteoglycan subunits were labeled with 14C-formaldehyde. Homogenates from human growth plates were examined for neutral protease activity using the proteoglycan subunits as substrates. Following incubation of the proteoglycan subunits with growth-plate homogenates at pH 5.3 and at pH 7.5 in the presence and absence of ten-millimolar magnesium chloride and calcium chloride, the digestion products were examined by gel chromatography on Sepharose-2B and 6B columns. Column eluants containing proteoglycan-subunit degradation products were monitored for uronic acid, hexose, and radio-activity. Maximum extensive degradation of proteoglycan subunits occurred at pH 7.5 in the presence of ten-millimolar magnesium chloride and calcium chloride.