We investigated a family with a brachydactyly type A2 and identified a heterozygous arginine to glutamine (R380Q) substitution in the growth/differentiation factor 5 (GDF5) in all affected individuals. The observed mutation is located at the processing site of the protein, at which the GDF5 precursor is thought to be cleaved releasing the mature molecule from the prodomain. In order to test the effect of the mutation, we generated the GDF5-R380Q mutant and a cleavage-resistant proGDF5 mutant (R380A/R381A) in vitro. Both mutants were secreted from chicken micromass cultures, but showed diminished biological activity. Western blot analyses showed that wt GDF5 was processed by the chicken micromass cells, whereas the mutants were not, indicating that the mutations interfere with processing and that this leads to a strong reduction of biological activity. To test the requirements for GDF5 processing in vitro we produced recombinant human (rh) proGDF5 wild-type protein in Escherichia coli. The results show that unprocessed (rh) proGDF5 is virtually inactive but can be proteolytically activated by different enzymes such as trypsin, furin, and MMP3. (rh) proGDF5 could thus be used as a locally administered depot form with retarded release of activity. In contrast to mature rhGDF5, (rh) proGDF5 shows a high solubility at physiological pH, a characteristic that might be useful for therapeutic applications.