Bovine chondromodulin-I (ChM-I) purified from fetal cartilage stimulated the matrix synthesis of chondrocytes, and inhibited the growth of vascular endothelial cells in vitro. The human counterpart of this bovine growth regulating factor has not been identified. We report here the cloning of human ChM-I precursor cDNA and its functional expression in Chinese hamster ovary (CHO) cells. We first identified a genomic DNA fragment which encoded the N-terminus of the ChM-I precursor, and then isolated human ChM-I cDNA from chondrosarcoma tissue by PCR. The deduced amino acid sequence revealed that mature human ChM-I consists of 120 amino acids. In total, 16 amino acid residues were substituted in the human sequence, compared to the bovine counterpart. Almost of all the substitutions were found in the N-terminal hydrophilic domain. In the C-terminal hydrophobic domain (from Phe42 to Val120), the amino acid sequence was identical except for Tyr90, indicating a functional significance of the domain. Northern blotting and in situ hybridization indicated a specific expression of ChM-I mRNA in cartilage. We also successfully determined the cartilage-specific localization of ChM-I protein, using a specific antibody against recombinant human ChM-I. Multiple transfection of the precursor cDNA into CHO cells enabled us to isolate the mature form of human ChM-I from the culture supernatant. Purified recombinant human ChM-I stimulated proteoglycan synthesis in cultured chondrocytes. In contrast, it inhibited the tube morphogenesis of cultured vascular endothelial cells in vitro and angiogenesis in chick chorioallantoic membrane in vivo.