The exact mechanism by which insulin reverses impaired wound healing is unknown. Previous investigators have shown that insulin is degraded in experimental wounds, suggesting that the action of insulin may be locally modified. The following study corroborates these findings and identifies the major proteinase responsible for insulin degradation in wound fluid (WF). Adult male Fisher rats were wounded by subcutaneous implantation of polyvinyl alcohol sponges while under pentobarbital sodium anesthesia. WF and serum were collected on 1, 5, 10, and 14 days postinjury. Decreased insulin concentration in late WF correlated with an increased insulin-degrading activity. Multiple proteinases appear to participate in the overall degradation of insulin in WF. However, the primary enzyme responsible for insulin degradation in WF was characterized by immunoprecipitation and immunoblotting and identified as the neutral thiol-dependent metalloproteinase, insulin-degrading enzyme (EC 3.4.24.56). Exogenous steroid administration caused a decrease in WF insulin-degrading activity. Glucagon and adrenocorticotrophin degradation was also observed, whereas minimal degradation of insulin-like growth factors I and II and epidermal growth factor was detected in WF. The ability to extracellularly degrade insulin may represent a unique mechanism for the regulation of this hormone's role in healing wounds.