A snake venom-like protease isolated by a differential display screen between normal and osteoarthritis (OA)-affected cartilage (designated as cSVP) has a cDNA sequence identical to TNF-alpha convertase enzyme (TACE). TACE shows the presence of an unknown prodomain, a cysteine switch, a catalytic domain, a zinc binding region, a disintegrin region, an EGF-like domain, a transmembrane domain, and a unique cytoplasmic region. A TACE construct harboring the signal + prodomain + catalytic region (TACE-SPCdeltaDETCy), expressed in baculovirus could cleave preferentially (approximately 12-fold) the TNF-specific peptide over the matrix metalloproteases peptide in vitro. This recombinant protein also cleaved the natural substrate GST-ProTNF-alpha to TNF-alpha (17 kDa) in vitro. The mRNA for TACE, which is broadly distributed and differentially expressed in a variety of human tissues, is up-regulated in arthritis-affected cartilage, but not normal cartilage. OA-affected cartilage also expressed TNF-alpha mRNA that was not detected in normal cartilage. The OA-affected cartilage (in explant assays) spontaneously released TNF-alpha and IL-8 in ex vivo conditions. Addition of TNF-alphaR fused to IgG Fc fragment (TNF-alphaR:Fc) in the presence or absence of soluble IL-1R (with which it acted additively) significantly attenuated the spontaneous/autocrine release of articular IL-8 in this assay. These experiments demonstrate a functional paracrine/autocrine role of TNF-alpha in OA-affected cartilage that may depend, in part, on up-regulated levels of chondrocyte-derived TACE.