Pigment epithelium-derived factor (PEDF) is a neurotrophic protein present in low amounts in conditioned medium of cultured fetal human retinal pigment epithelial cells. Recently, the PEDF cDNA has been cloned from a fetal human cDNA library, and its derived amino acid sequence identified it as a member of the serine protease inhibitor (serpin) supergene family (Steele, F. R., Chader, G. J., Johnson, L. V., and Tombran-Tink, J. (1993) Proc. Natl. Acad. Sci. U. S. A. 90, 1526-1530). We have prepared recombinant expression constructs from the fetal human PEDF cDNA and obtained milligram amounts of biologically active PEDF from Escherichia coli. The full-length open reading frame (Met1-Pro418) and a truncated form (Asp44-Pro418) were used in our constructs. Induction from a vector containing the truncated PEDF version, named pEV-BH, produced a protein (BH) of expected size (M(r) 42,800) associated with inclusion bodies, which contained 25-40% of expressed protein. After solubilization, BH was highly purified by gel filtration and cation exchange chromatography. The NH2-terminal sequence of the purified protein matched that of the pEV-BH construct. We have conducted neurite outgrowth assays in a human retinoblastoma Y-79 cell culture system. Recombinant PEDF (BH) demonstrated neurotrophic activity, as reported for the native PEDF. Thus, unfolded and refolded in vitro BH retained a potent biological activity. In parallel experiments, protease inhibition assays were performed. Recombinant PEDF did not have an effect on trypsin, chymotrypsin, elastase, cathepsin G, endoproteinase Lys-C, endoproteinase Glu-C, or subtilisin activity, suggesting that inhibition of known serine proteases is not the biochemical pathway for the PEDF neutrophic activity.