The 33-kDa matrix protein BM-40 (SPARC, osteonectin) consists of an acidic N-terminal domain I, a central cysteine-rich follistatin-like module, and a C-terminal extracellular calcium-binding (EC) module. Previous studies attributed collagen IV and high affinity calcium binding of BM-40 to its EC module, which was shown by x-ray crystallography to consist of an EF-hand pair surrounded by several ␣-helical and loop segments. This module was now shown by surface plasmon resonance assay to bind with similar affinities to collagens I, III, and V. Cleavage of recombinant BM-40 and its EC module by collagenase-3, gelatinases A and B, matrilysin, and stromelysin-1 showed similar fragment patterns, whereas collagenase-1 was inactive. Some differences were, however, observed in cleavage rates and the preference of certain cleavage sites. Edman degradation of fragments demonstrated only three to four major cleavage sites in the central region of domain I and a single uniform cleavage in helix C of the EC module. Cleavage is accompanied by a 7-20-fold increase in binding activity for collagens I, IV, and V but revealed only small effects on calcium-dependent ␣-helical changes in the EC module. The data were interpreted to indicate that helix C cleavage is mainly responsible for enhancing collagen affinity by exposing the underlying helix A of the EC module. A similar activation may also occur in situ as indicated previously for tissue-derived BM-40.The small calcium-binding glycoprotein (33 kDa) referred to as BM-40, SPARC, or osteonectin has been shown to have a widespread occurrence in extracellular matrices of various organs with a particularly high expression found during morphogenesis, tissue remodeling, and repair. The protein exhibits anti-adhesive properties in cell culture and modulates the expression of certain extracellular receptors. Several extracellular ligands have been identified for BM-40 including some collagen types and cytokines (1). This indicated various binding sites on BM-40 in agreement with a previous proposal of a mosaic structure for the protein (2). The most recent interpretation of the domain structure based on recombinant deletion mutants and a crystal structure of a fragment encompassing the C-terminal 150 residues (3, 4) demonstrated an acidic and flexible N-terminal domain I (ϳ50 residues) followed by a follistatin-like (FS) 1 module (ϳ75 residues) and a novel extracellular calcium-binding (EC) module (ϳ150 residues). X-ray crystallography of this EC module demonstrated two opposing calcium-binding EF hands, as found in many intracellular proteins (5), which were in close contact to an extended ␣ helix (4). A combination of adjacent FS and EC modules has been detected in the cDNA sequences of several more extracellular proteins suggesting the existence of a protein family (1, 3, 4). Yet it is not known so far whether they are functionally related to BM-40.The binding of BM-40 to the fibril-forming collagens I, III, and V and basement membrane collagen IV has been demonstrated and depended ...