The deposition of insoluble functional collagen occurs following extracellular proteolytic processing of procollagens by procollagen N- and C-proteinases, fibril formation, and lysyl oxidase dependent cross-linking. Procollagen C-proteinases in addition process and activate lysyl oxidase. The present study evaluates a possible role for procollagen C-proteinases in controlling different aspects of collagen deposition in vitro. Studies determine whether inhibition of procollagen C-proteinase activity with a specific BMP-1 inhibitor results in perturbations in lysyl oxidase activation, and in collagen processing, deposition, and cross-linking in phenotypically normal cultured murine MC3T3-E1 cells. Data show that BMP-1 Inhibitor dose dependently inhibits lysyl oxidase activation by up to 50% in undifferentiated proliferating cells. In differentiating cultures, BMP-1 inhibitor decreased collagen processing but did not inhibit the accumulation of mature collagen cross-links. Finally, electron microscopy studies show that collagen fibril diameter increased. Thus, inhibition of procollagen C-proteinases results in perturbed collagen deposition primarily via decreased collagen processing.