Vascular endothelial growth factor (VEGF) is a specific angiogenic factor, and thrombospondin (TSP), is a potent inhibitor of angiogenesis. To better understand the role of TSP as an anti-angiogenic agent, we have identified its specific domains that participate in its anti-angiogenic activity and examined the mechanism of its inhibitory effect on VEGF(165) induced angiogenesis. Exogenously added TSP inhibited VEGF(165) induced angiogenesis (proliferation and tube formation of human dermal microvascular endothelial cells [HDMEC] and neovascular outgrowth from human arterial rings). Although both VEGF(165) and TSP are heparin binding proteins, TSP had a higher affinity for (125)I-heparin than VEGF(165) (K(d1) 4 nM and K(d2) 14 nM for TSP; K(d) 91 nM for VEGF(165)). TSP displaced 36% of (125)I-VEGF(165) from HDMEC and this was comparable to the 27% reduction in (125)I-VEGF(165) binding to HDMEC upon cleavage of cell surface heparan sulfate (HS). About 35% of the mitogenic activity of VEGF(165) was attributable to its heparin binding region. These results indicate that a proportion of the mitogenic activity of VEGF(165) is inhibited by TSP via competition for cell surface HS. Further, (125)I-VEGF(165) bound directly to TSP in a saturable, concentration dependent manner, and heparin modulated this binding. The mAbs to the heparin binding domain to the type 1 and type 3 repeats of TSP inhibited the binding of VEGF(165) to TSP, and also blocked the inhibitory effect of TSP on VEGF(165) induced HDMEC proliferation. We conclude that (i) the anti-angiogenic activity of TSP is localized in its heparin binding domain and type 1 and type 3 repeats (ii) TSP inhibits angiogenesis by at least two separate mechanisms, (a) displacement of VEGF(165) from endothelial cell HS and (b) direct binding to VEGF(165).