Neudesin is a secreted protein with neurotrophic activity in neurons and undifferentiated neural cells. We report here that neudesin is an extracellular heme-binding protein and that its neurotrophic activity is dependent on the binding of heme to its cytochrome b(5)-like heme/steroid-binding domain. At first, we found that at least a portion of the purified recombinant neudesin appeared to bind hemin because the purified neudesin solution was tinged with green and had a sharp absorbance peak at 402 nm. The addition of exogenous hemin extensively increased the amount of hemin-bound neudesin. In contrast, neudesinDeltaHBD, a mutant lacking the heme-binding domain, could not bind hemin. The neurotrophic activity of the recombinant neudesin that bound exogenous hemin (neudesin-hemin) was significantly greater than that of the recombinant neudesin in either primary cultured neurons or Neuro2a cells, suggesting that the activity of neudesin depends on hemin. The neurotrophic activity of neudesin was enhanced by the binding of Fe(III)-protoporphyrin IX, but neither Fe(II)-protoporphyrin IX nor protoporphyrin IX alone. The inhibition of endogenous neudesin by RNA interference significantly decreased cell survival in Neuro2a cells. This indicates that endogenous neudesin possibly contains hemin. The experiment with anti-neudesin antibody suggested that the endogenous neudesin detected in the culture medium of Neuro2a cells was associated with hemin because it was not retained on a heme-affinity column at all. Neudesin is the first extracellular heme-binding protein that shows signal transducing activity by itself. The present findings may shed new light on the function of extracellular heme-binding proteins.