Children with chronic renal failure (CRF) have normal or high serum levels of GH, IGF-I, and IGF-II. Despite this, the serum of CRF patients has low IGF bioactivity, which may contribute to CRF growth failure. Recent studies suggest that excess IGF binding proteins (IGFBPs) in the approximately 35-kD fractions of CRF serum contribute to this low IGF bioactivity. This report characterizes a 29-kD form of IGFBP-3, IGFBP-3(29), which accumulates in the approximately 35-kD fractions of CRF serum and peritoneal dialysate. Deglycosylation and [125I]IGF ligand blot studies show that IGFBP-3(29) is a glycosylated IGFBP-3 fragment with low affinity for IGF peptides. Using an IGFBP-3 antibody column, IGFBP-3(29) was purified to homogeneity from the approximately 35-kD fractions of peritoneal dialysate from children with CRF. Compared with native IGFBP-3, pure IGFBP-3(29) has a 4-10-fold lower affinity for IGF-II and a 200-fold lower affinity for IGF-I. Consistent with the binding data, IGFBP-3(29) inhibited IGF-II-stimulated thymidine incorporation in chondrosarcoma cells, but was a less potent inhibitor than native IGFBP-3; also, native IGFBP-3 clearly inhibited IGF-I-stimulated thymidine incorporation in chondrosarcoma cells and potentiated IGF-I-stimulated aminoisobutyric acid uptake in bovine fibroblasts, but higher concentrations of IGFBP-3(29) had no effect on these IGF-I actions. Thus, the 29-kD IGFBP-3 form that accumulates in CRF serum and extravascular spaces is an IGFBP-3 fragment that may modulate IGF-II, but not IGF-I, effects on target tissues. Whether IGFBP-3(29) plays any role in the growth failure of children with CRF remains to be determined.