ADAMTS1 is an extracellular metalloproteinase known to participate in a variety of biological processes that includes inflammation, angiogenesis, and development of the urogenital system. Many of its functions rely on its catalytic activity, which thus far has been limited to the cleavage of the matrix proteoglycans aggrecan and versican. However, it is likely that other substrates exist. Using a yeast two-hybrid screen, we identified the Kunitz-type inhibitor, tissue factor pathway inhibitor-2 (TFPI-2), as a binding partner of ADAMTS1. The interaction was confirmed by several biochemical and cell-based assays. In addition, our studies revealed alterations in the pattern of TFPI-2-secreted isoforms and in its extracellular location caused by the specific action of ADAMTS1. Interestingly, we found that TFPI-2 is a novel substrate of ADAMTS1. The cleavage removes a protease-sensitive C-terminal region in TFPI-2, altering its binding properties. The proposed role of TFPI-2 as a maintenance factor of extracellular remodeling suggests the indirect function of ADAMTS1 as an additional homeostatic player by its ability to alter the extracellular location of TFPI-2 and, therefore, to disrupt the remodeling machinery, a phenomenon directly associated to pathologies such as atherosclerosis and tumor progression.The extracellular milieu has been recognized as a dynamic scenario that directly influences proliferation, survival, migration, and biosynthetic activities of cells. The constituents of this extracellular environment include growth factors, chemokines, cell surface proteins, and an extensive list of matrix components with structural and signaling properties. Matrix proteases and their respective inhibitors are also important components of the extracellular milieu with the added value that these molecules modify, degrade, or inflict functional alterations to most of the components previously listed (1). In fact, modification of extracellular components by processing and/or proteolysis is a frequent event during morphogenesis and tissue repair and, in an altered manner, during the progression of various pathological conditions (2).The ADAMTS (a disintegrin and metalloproteinase with thrombospondin motifs) family of proteases includes a group of 19 secreted enzymes with a more restricted spectrum of catalytic activities than the well known matrix metalloproteinases (MMP) 2 (3). ADAMTS1, the first member described (4), has been shown to display anti-angiogenic properties (5). Systemic deletion of adamts1 in mice resulted in multiple defects in the urogenital system (6, 7). The enzyme is known to have catalytic activity toward matrix proteoglycans, particularly versican and aggrecan (8,9).Mechanistically, it is not evident that the outcomes of the gene-deletion studies can be linked with the catalytic profile known for this enzyme. Thus, it is possible that either other domains contribute to the spectrum of biological functions and/or that additional biologically relevant substrates are yet to be identified. The modular...