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Laminin-5 (Lm5), the major adhesion ligand of basal epithelial cells, undergoes complex extracellular proteolytic processing that influences cell adhesion and migration. In tumor cell lines, the proteolytic truncation of the C-terminal G domain of the Lm alpha3 chain induces assembly of hemidesmosomes and downregulates cell migration. To define the biological functions of the alpha3 G domain processing in physiological conditions, we have expressed a series of mutant alpha3 complementary DNA in human primary alpha3-null keratinocytes immortalized by human papillomavirus E6E7 (HKalpha3 cells). Using monolayer and organotypic cell cultures we show that: (1) the hinge region between subdomains G3 and G4 carries the proteolytic cleavage sites; (2) nucleation of the hemidesmosomal proteins is independent of the proteolytic maturation of the alpha3 G domain, whereas formation of mature hemidesmosomes relies on proteolytic cleavage of alpha3; and (3) the proteolytic processing plays no role in cell migration, which suggests that nucleation of hemidesmosomal structures in culture does not reflect the migratory potential of the epithelial cells. Our results also demonstrate that HKalpha3 cells are a unique model system, which will be useful to dissect the functions and molecular interactions of Lm5.