Pigment epithelium-derived factor (PEDF), a neurite-promoting factor, has an amino acid primary structure that is related to members of the serine protease inhibitor (serpin) family. Controlled proteolysis of native PEDF (50 kDa) with either trypsin, chymotrypsin, elastase, or subtilisin yields in each case one major limited product of 46 kDa as analyzed by SDS-polyacrylamide gel electrophoresis. N-terminal sequence analysis of the isolated 46-kDa products indicates a favored cleavage region located toward the C-terminal end of PEDF. A proteolyzed PEDF protein reaction mixture reveals two overlapping sequences: that of the N terminus of intact PEDF and that of an internal region, consistent with cleavage of PEDF about position 382. These data indicate that PEDF protein has a globular conformation with one protease-sensitive exposed loop that contains the homologous serpin-reactive site. Cleavage within the reactive-site loop of PEDF does not cause a conformational change in the molecules (the stressed (S)-->relaxed (R) transition) and results in heat denaturation identical to its native counterpart. This lack of conformational change is also seen upon cleavage within the reactive-site loop of the noninhibitory serpin ovalbumin. Furthermore, the PEDF neurite-promoting function is not lost with cleavage of the exposed loop. Recombinant PEDF polypeptide fragments with larger truncations from the C-terminal end show neurotrophic activity. Our results clearly indicate that integrity of the PEDF homologous serpin reactive center is dispensable for neurotrophic activity. Thus, the PEDF induction of neurites must be mediated by a mechanism other than serine protease inhibition. Altogether our data indicate that PEDF belongs to the subgroup of noninhibitory serpins and that its N-terminal region confers a neurite-promoting activity to the protein. The neurotrophic active site of PEDF is separated from the serpin reactive-site loop, not only in the primary structure, but also in the folded protein structure.