Transforming growth factor-betas (TGF-betas) are produced by most cells in large latent complexes of TGF-beta and its propeptide (LAP) associated with a binding protein. The latent TGF-beta binding proteins (LTBPs-1, -2 and -3) mediate the secretion and, subsequently, the association of latent TGF-beta complexes with the extracellular matrix (ECM). The association of beta1-LAP with LTBP-1 was characterized at the molecular level with an expression system in mammalian cells, where TGF-beta1 and various fragments of LTBP-1 were co-expressed and secreted with the aid of a signal peptide synthesized to the LTBP-1 constructs. Immunoblotting of the fusion protein complexes indicated that the third 8-Cys repeat of LTBP-1 bound covalently to the LAP region of TGF-beta1. The cysteine required for the association between LTBP-1 and beta1-LAP was mapped to Cys33 of beta1-LAP. The N-terminal region of LTBP-1 consisting of the first 400 amino acids was found to associate covalently with the ECM. The data indicate that an 8-Cys repeat of LTBP is capable of covalent and specific protein-protein interactions. These interactions are mediated by exchanging cysteine disulfide bonds between the core 8-Cys repeat and an optionally associated protein during the secretion. This is, to our knowledge, the first demonstration of an extracellular protein module that is able to exchange cysteine disulfide bonds with heterologous ligand proteins.