Vasoinhibin belongs to a family of angiogenesis inhibitors generated when the fourth α-helix (H4) of the hormone prolactin (PRL) is removed by specific proteolytic cleavage. The antiangiogenic properties are absent in uncleaved PRL, indicating that conformational changes create a new bioactive domain. However, the solution structure of vasoinhibin and the location of its bioactive domain are unknown. Molecular dynamic simulation (MD) showed that the loss of H4 exposes the hydrophobic nucleus of PRL and leads to the compression of the molecule into a three-helix bundle that buries the hydrophobic nucleus again. Compression occurs by the movement of loop 1 (L1) and its interaction with α-helix 1 (H1) generating a new L1 conformation with electrostatic and hydrophobic surfaces distinct from those of PRL, that may correspond to a bioactive domain. Consistent with this model, a recombinant protein containing the first 79 amino acids comprising H1 and L1 of human PRL inhibited the proliferation and migration of endothelial cells and upregulated the vasoinhibin target genes, IL1A and ICAM1. This bioactivity was comparable to that of a conventional vasoinhibin having the 123 residues encompassing H1, L1, Η2, L2, and Η3 of human PRL. These findings extend the vasoinhibin family to smaller proteins and provide important structural information, which will aid in antiangiogenic drug development.