We report the isolation and characterization of a third isoform of placenta growth factor (PlGF), generated by alternative splicing of its RNA transcript. This novel form of PlGF, PlGF-3, was cloned by the polymerase chain reaction technique using a human cDNA library prepared from the terminal placental tissue. PlGF-3 contains an in-frame insertion of 72-amino acids near the C-terminal portion of PlGF-1. Southern blot analysis revealed that a single gene encoded PlGF-2 and PlGF-3. Nucleic acid sequence analysis found the insertion of 216 nucleotides of PlGF-3 between exon 4 and exon 5 of the PlGF gene. Northern blot and tissue distribution studies discovered two mRNA species for PlGF-3, which were both uniquely expressed in the placenta. Transient expression of PlGF-3 cDNA in mammalian cells showed PlGF-3 was detected in the conditioned medium as both dimers and monomers. Unlike PlGF-2, PlGF-3 lacked heparin-binding affinity. Thus, alternative splicing of PlGF RNA produces at least three polypeptides with different secretion pattern, heparin-binding affinity and dimerization properties.