Tissue inhibitor of metalloproteinase (TIMP) was purified and molecularly cloned on the basis of its erythroid-potentiating activity (EPA). TIMP/EPA appears to be a bifunctional molecule with both growth factor and anti-enzymatic activity. Recently, a second TIMP-related molecule was identified and we have investigated its possible erythroid-potentiating activity. Native, purified human TIMP-2 was assayed for erythroid-potentiating activity using an in vitro erythroid burst formation assay and was compared with that of previously characterized recombinant EPA/TIMP-1. The results demonstrate that both members of the tissue inhibitor of metalloproteinase family, TIMP-1 and TIMP-2, possessed erythroid potentiating activity which was inhibited by antibodies developed to neutralize EPA. These results suggest that TIMP-2 shares a common structural domain with EPA/TIMP-1 that is responsible for the erythroid-potentiating activity of these inhibitors. Therefore, TIMP-1 and TIMP-2, with both anti-protease activity and growth factor activity, join a family of bifunctional molecules such as fibroblast growth factor and thrombin which have both enzymatic and growth factor activity.