Pigment epithelium-derived factor (PEDF) is a collagen-binding protein that is abundantly distributed in various tissues, including the eye. It exhibits various biological functions, such as anti-angiogenic, neurotrophic, and neuroprotective activities. PEDF also interacts with extracellular matrix components such as collagen, heparan sulfate proteoglycans (HSPGs), and hyaluronan. The collagen-binding property has been elucidated to be important for the anti-angiogenic activity in vivo (Hosomichi, J., Yasui, N., Koide, T., Soma, K., and Morita, I. (2005) Biochem. Biophys. Res. Commun. 335, 756-761). Here, we investigated the collagen recognition mechanism by PEDF. We first narrowed down candidate PEDF-binding sequences by taking advantage of previously reported structural requirements in collagen. Subsequent searches for PEDF-binding sequences employing synthetic collagen-like peptides resulted in the identification of one of the critical binding sites for PEDF, human α1(I)(929-938) (IKGHRGFSGL). Further analysis revealed that the collagen recognition by PEDF is sequence- and conformation-specific, and the high affinity binding motif is KGXRGFXGL in the triple helix. The PEDF-binding motif significantly overlapped with the heparin/HSPG-binding motif, KGHRG(F/Y). The interaction of PEDF with collagen I was specifically competed with by heparin but not by chondroitin sulfate-C or hyaluronan. The binding sequences for PEDF and heparin/HSPG also overlapped with the covalent cross-linking sites between collagen molecules. These findings imply a functional relationship between PEDF and HSPGs during angiogenesis, and the interaction of these molecules is regulated by collagen modifications.