IGFBP5 is a multifunctional protein which acts not only as a traditional binding protein but also functions as a growth factor independent of IGFs to stimulate bone formation. It has been predicted that the intrinsic growth factor action of IGFBP5 involves binding of IGFBP5 to a putative receptor to induce downstream signaling pathways and/or nuclear translocation of IGFBP5 to influence transcription of genes involved in osteoblast cell proliferation/differentiation. We undertook studies to identify proteins that bound to IGFBP5 using IGFBP5 as bait in a yeast two hybrid screen of the U2 human osteosarcoma cell cDNA library. One of the clones that interacted strongly with the bait under high stringency conditions corresponded to a novel IGFBP5 interacting protein (IGFBP5-IP) encoded by a gene that resides in mouse chromosome 10. The interaction between IGFBP5-IP and IGFBP5 is confirmed by in vitro co-immunoprecipitation studies, using pFlag and IGFBP5 polyclonal antibody, and cell lysates over-expressing both IGFBP5-IP and IGFBP5. Northern blot and RT-PCR analysis showed that the IGFBP-IP is expressed in both untransformed normal human osteoblasts and in osteosarcoma cell lines, which are known to produce IGFBP5. In order to determine both the role of IGFBP5-IP, we evaluated the effect of blocking the expression of IGFBP5-IP on osteoblast proliferation. We found that using a IGFBP5-IP-specific si-hairpin plasmid resulted in a decrease in both basal and IGFBP5-induced osteoblast cell proliferation. Based on these findings, we predict that IGFBP5-IP may act as intracellular mediator of growth promoting actions of IGFBP5 and perhaps other osteo-regulatory agents in bone cells.