Pigment epithelium-derived factor (PEDF) is a neurotrophic protein secreted by cultured human fetal retinal pigment epithelium (RPE) cells. PEDF belongs to the serine protease inhibitors (serpin) superfamily. Work in this laboratory is aimed at elucidating the mechanism of action of PEDF. The presence of PEDF in the eye was investigated using a specific antibody to PEDF developed from recombinant human PEDF, Ab-rPEDF. Our results indicate that PEDF is present in the retinal interphotoreceptor matrix (IPM), vitreous and aqueous human of the bovine eye, and in vitreous and aqueous humor of the monkey eye. Furthermore, the bovine IPM-mediated neurotrophic activity wa blocked by antiserum Ab-rPEDF, indicating that PEDF is the sole component of the IPM to induce neurite-outgrowth in retinoblastoma cells. Thus, PEDF is a natural molecule found extracellularly in the eye and with neurotrophic properties. PEDF was purified and characterized from the bovine IPM and bovine and monkey vitreous. The folded protein conformation of native pEDF was studied. Limited proteolysis experiments indicate the PEDF has a serpin folded-protein conformation, i.e., a globular protein with a protease-sensitive loop toward its C-terminus that contains the homologous serpin reactive center. Heat stability assays of unmodified and cleaved PEDF revealed that PEDF lacks that serpin conformational changes S yields R upon cleavage at the homologous reactive loop. This result indicates that PEDF behaves as a noninhibitory serpin. The role of the homologous serpin reactive loop on neurotrophic activity was investigated. PEDF induction of neurite-outgrowth was not impaired by cleavage at the homologous reactive loop. Neurotrophic assays with recombinant PEDF polypeptides missing increasing portions from the C-terminal region demonstrated that the N-terminal region of PEDF confers a neurite-outgrowth activity to the protein. Our results indicate that the neurite-induction by PEDF is mediated by a mechanism other than inhibition of a serine protease. A spacial model of PEDF showing the proposed location of the neurotrophic active region relative to the homologous serpin reactive loop was prepared. We have separated serine proteolytic activities from inhibitors in vitreous. These proteases cleave the serpin PEDF at its sensitive-loop, as previously shown for serpinases. In addition to processing PEDF in vitro, these serpinase-like activities might play a role in regulating PEDF in vivo.