We identified fresh human leukocytes as an abundant source of the candidate epithelial tumor suppressor gene, Ecrg4, an epigenetically regulated gene, which unlike other tumor suppressor genes, encodes an orphan-secreted, ligand-like protein. In human cell lines, Ecrg4 gene expression was low, Ecrg4 protein undetectable, and Ecrg4 promoter hypermethylation high (45-90%) and reversible by the methylation inhibitor 5-AzaC. In contrast, Ecrg4 gene expression in fresh, normal human PBMCs and PMNs was 600-800 times higher than in cultured cell lines, methylation of the Ecrg4 promoter was low (<3%), and protein levels were readily detectable in lysates and on the cell surface. Flow cytometry, immunofluorescent staining, and cell surface biotinylation established that full-length, 14-kDa Ecrg4 was localized on PMN and monocyte cell surfaces, establishing that Ecrg4 is a membrane-anchored protein. LPS treatment induced processing and release of Ecrg4, as detected by flow and immunoblotting, whereas an effect of fMLF treatment on Ecrg4 on the PMN cell surface was detected on the polarized R2 subpopulation of cells. This loss of cell surface Ecrg4 was associated with the detection of intact and processed Ecrg4 in the conditioned media of fresh leukocytes and was shown to be associated with the inflammatory response that follows severe, cutaneous burn injury. Furthermore, incubation of macrophages with a soluble Ecrg4-derived peptide increased the P-p65, suggesting that processing of an intact sentinel Ecrg4 on quiescent circulating leukocytes leads to processing from the cell surface following injury and macrophage activation.