We have screened a human cDNA library using an expressed sequence tag related to the BM-40/secreted protein, acidic and rich in cysteine (SPARC)/osteonectin family of proteins and isolated a novel cDNA. It encodes a protein precursor of 424 amino acids that consists of a signal peptide, a follistatin-like domain, a Ca2+-binding domain, a thyroglobulin-like domain, and a C-terminal region with two putative glycosaminoglycan attachment sites. The protein is homologous to testican-1 and was termed testican-2. Testican-1 is a proteoglycan originally isolated from human seminal plasma that is also expressed in brain. Northern blot hybridization of testican-2 showed a 6.1-kb mRNA expressed mainly in CNS but also found in lung and testis. A widespread expression in multiple neuronal cell types in olfactory bulb, cerebral cortex, thalamus, hippocampus, cerebellum, and medulla was detected by in situ hybridization. A recombinant fragment consisting of the Ca2+-binding EF-hand domain and the thyroglobulin-like domain of testican-2 showed a reversible Ca2+-dependent conformational change in circular dichroism studies. Testican-1 and -2 form a novel Ca2+-binding proteoglycan family built of modular domains with the potential to participate in diverse steps of neurogenesis.