This report describes the cloning, expression and characterization of two members of a novel human gene family of proteins, HBNF and MK, which exhibit neurite outgrowth-promoting activity. The HBNF cDNA gene codes for a 168-residue protein which is a precursor for a previously described brain-derived heparin-binding protein of 136 amino acids. The second human gene identified in this study, called MK, codes for a 143-residue protein (including a 22-amino acid signal sequence) which is 46% homologous with HBNF. Complementary DNA constructs coding for the mature HBNF and MK proteins were expressed in bacteria and purified by heparin affinity chromatography. These recombinant proteins exhibited neurite-outgrowth promoting activity, but lacked mitogenic activity. The HBNF gene is expressed in the brain of adult mice and rats, but only minimal expression of MK was observed in this tissue. Different patterns of developmental expression were observed in the embryonic mouse, with MK expression peaking in the brain between days E12 and E14 and diminishing to minimal levels in the adult, while expression of HBNF mRNA was observed to gradually increase during embryogenesis, reaching a maximal level at birth and maintaining this level into adulthood. Expression of these genes was also observed in the human embryonal carcinoma cell line, NT2/D1. Retinoic acid induced the expression of HBNF and MK 6- and 11-fold, respectively, in this cell line. Our studies indicate that HBNF and MK are members of a new family of highly conserved, developmentally regulated genes that may play a role in nervous tissue development and/or maintenance.