We found by using a 45Ca2+ overlay technique a large amount of Ca(2+)-binding activity in bovine amniotic fluid from which a novel calcium-binding protein (CaBP) was purified and is referred to as CAAF1 (calcium-binding protein in amniotic fluid-1), with an apparent molecular mass of 8 kDa determined by N-tris(hydroxymethyl)-methylglycine/ SDS-PAGE. It was structurally homologous with MRP/calgranulin proteins (MRP8/calgranulin A and MRP14/calgranulin B), members of the S100 protein family, which are abundantly found in the cytoplasm of granulocytes and macrophages. CAAF1 lacked the predicted signal peptide sequence, which is consistent with other CaBPs. The tissue and cellular distribution of CAAF1 was determined by monoclonal antibodies developed against this protein. Its immunoreactivity was found in squamous epithelial cells, neutrophils, and some macrophages throughout the fetal body. An especially characteristic staining pattern was obtained in the squamous epithelium, including that of the esophagus, skin and amnion: CAAF1 was detected in the suprabasal squamous epithelial cells undergoing differentiation, but not in the cells in the proliferating basal layer. Northern blot analysis also showed that CAAF1 mRNA was highly expressed in bovine fetal esophagus and skin. On the other hand, our ELISA studies showed that CAAF1 protein was present in amniotic fluid at a concentration of about 120 nM, which was over 30 times as high as that in the fetal serum. These results suggested that CAAF1 is one of the stage-specific proteins in the differentiation of squamous epithelial cells, and that CAAF1 is preferentially produced by fetal squamous epithelial cells, including epidermal keratinocytes and amniotic epithelial cells, and it is stored in the amniotic fluid during embryogenesis.