Insulin-like growth factor binding protein-3 (IGFBP-3), the product of a tumor suppressor target gene, is associated with cellular senescence and can induce apoptosis by IGF-I-dependent and -independent mechanisms. IGFBP-3 controls the bioavailability of IGFs in the extracellular environment and is known to be subject to degradation by various extracellular proteases. We show here that IGFBP-3 exists as nuclear protein in situ in human osteosarcoma tissue. Strikingly, IGFBP-3 was predominantly localized in the nuclei of osteoid forming osteosarcoma cells, but not detectable in chondroid forming osteosarcoma cells. Concerning the mechanism by which the abundance of nuclear IGFBP-3 could be regulated, we demonstrate for the first time that nuclear IGFBP-3 is a direct target of ubiquitin/proteasome-dependent degradation. We show that IGFBP-3 degradation depends on an active ubiquitin-E1-ligase, specific 26S proteasome inhibitors can efficiently stabilize nuclear IGFBP-3, and the metabolic half-life of nuclear IGFBP-3 is strongly reduced relative to cytoplasmic IGFBP-3. Nuclear IGFBP-3 is highly polyubiquitinated at multiple lysine residues in its conserved carboxyl-terminal domain and stabilized through mutation of two Cterminal lysine residues. Moreover, we demonstrate that IGFBP-3, if ectopically expressed in the nucleus, can induce apoptotic cell death. These results suggest that ubiquitin/proteasomemediated proteolysis of nuclear IGFBP-3 may contribute to downregulation of apoptosis.