The anti-angiogenic activity of endostatin (ES) depends on interactions with heparan sulfate (HS). In the present study, intact HS chains of >/=15 kDa bound quantitatively to ES whereas N-sulfated HS decasaccharides, with affinity for several fibroblast growth factor (FGF) species, failed to bind. Instead, ES-binding oligosaccharides composed of mixed N-sulfated and N-acetylated disaccharide units were isolated from pig intestinal HS. A 10/12mer ES-binding epitope was identified, with two N-sulfated regions separated by at least one N-acetylated glucosamine unit (SAS-domain). Cleavage at the N-acetylation site disrupted ES binding. These findings point to interaction between discontinuous sulfated domains in HS and arginine clusters at the ES surface. The inhibitory effect of ES on vascular endothelial growth factor-induced endothelial cell migration was blocked by the ES-binding SAS-domains and by heparin oligosaccharides (12mers) similar in length to the ES-binding SAS-domains, but not by 6mers capable of FGF binding. We propose that SAS-domains modulate the biological activities of ES and other protein ligands with extended HS-binding sites. The results provide a rational explanation for the preferential interaction of ES with certain HS proteoglycan species.