A critical transition in ovarian follicular development is the selection of a dominant follicle, capable of ovulating, from a cohort of synchronously growing antral follicles. However, little is known about mechanisms and factors that regulate the selection and growth of dominant ovarian follicles. We have investigated whether a component of the insulin-like growth factor (IGF) system, namely IGFBP-4 protease, is associated with the establishment of follicular dominance in cattle. IGFBP proteases degrade IGFBPs, freeing IGFs to interact with their receptors. In experiment 1, follicular fluid from preovulatory follicles (n = 4) degraded about 80% of the added recombinant human (rh) IGFBP-4 within 18 h of incubation. The IGFBP-4 protease exhibited optimal activity at neutral/basic pH and its sensitivity to various protease inhibitors suggested a metalloprotease. The decline in the intensity of the band corresponding to intact rhIGFBP-4 was accompanied by the appearance of immunoreactive fragments of molecular weights ∼18 and 14 kDa, which were not detectable by ligand blot analysis. In experiment 2, follicular fluid samples were collected from dominant and subordinate follicles on Day 2 or 3 of the first follicular wave, after ovariectomy (experiment 2a, n = 3/day) or by ultrasound-guided follicular aspiration (experiment 2b, n = 4–5/day). Estradiol concentrations in follicular fluid from dominant vs. subordinate follicles confirmed their identities and indicated that the dominant follicle had been selected by Day 2 of the follicular wave. In both experiments 2a and 2b, IGFBP-4 proteolytic activity was 2- to 3.5-fold (P < 0.05) and 5-fold (P < 0.01) higher in follicular fluid from dominant than subordinate follicles on Days 2 and 3 of the follicular wave, respectively. The finding that IGFBP-4 proteolytic activity is higher in dominant, estrogen-active follicles than in subordinate follicles of the same cohort, as early as Day 2 of the follicular wave, strongly suggests a role for IGFBP-4 protease in the establishment of ovarian follicular dominance.