Insulin-like growth factor (IGF) I, a polypeptide synthesized by skeletal cells, and its amino terminus truncated derivative desamino-(1-3)-IGF I (des-IGF I) were compared for their effects on bone formation in vitro. Des-IGF I and IGF I were studied for their effects on DNA and collagen synthesis in cultures of intact fetal rat calvariae and of osteoblast-enriched (Ob) cells from fetal rat parietal bone, and for their ability to bind to IGF receptors in Ob cells and to IGF binding proteins (IGF-BPs) from calvariae. Des-IGF I and IGF I increased [3H] thymidine incorporation into DNA, [3H]proline incorporation into collagen and noncollagen protein, and the mitotic index in intact calvariae. Both factors had similar actions in calvariae. Des-IGF I stimulated all parameters studied at 1 nM, and IGF I was effective on the labeling of DNA at 1 nM, but concentrations of 10 nM were required to observe changes in collagen and noncollagen protein synthesis and in the mitotic index. The effect of des-IGF I on collagen synthesis was independent from that on DNA synthesis, as it is known for IGF I, and both forms of IGF I were equally potent for their inhibitory effects on collagen degradation in calvarial cultures. In Ob cells, neither des-IGF I nor IGF I altered the incorporation of [3H]thymidine into DNA, but both factors at 10-100 nM increased [3H]proline incorporation into collagen to a similar extent. Receptor studies revealed a similar binding capacity for des-IGF I and IGF I to the IGF I receptor(s) in Ob cells, although at 0.2 nM des-IGF I was slightly more effective than IGF I. In contrast, des-IGF I was 100-fold less effective than IGF I for its ability to bind to partially purified IGF-BPs from cultured calvariae. In conclusion, des-IGF I enhances calvarial DNA and collagen synthesis and osteoblastic collagen synthesis to a somewhat greater extent than IGF I, in spite of a much lesser affinity for IGF-BPs.