The proteolytic activation by thrombin of the proteinase-activated receptor 1 unveils the tethered peptide ligand and cleaves a 41-amino acid peptide. In this report, we show that this peptide, which we have designated as "parstatin," is a potent inhibitor of angiogenesis. Synthesized parstatin suppressed both the basic angiogenesis and that stimulated by basic fibroblast growth factor and vascular endothelial growth factor in the chick embryo model in vivo and in the rat aortic ring assay. Parstatin also abrogated endothelial cell migration and capillary-like network formation on the Matrigel and fibrin angiogenesis models in vitro. Treatment of endothelial cells with parstatin resulted in inhibition of cell growth by inhibiting the phosphorylation of extracellular signal-regulated kinases in a specific and reversible fashion and by promoting cell cycle arrest and apoptosis through a mechanism involving activation of caspases. We have shown that parstatin acts as a cell-penetrating peptide, exerting its biological effects intracellularly. The uptake into cells and the inhibitory activity were dependent on parstatin hydrophobic region. These results support the notion that parstatin may represent an important negative regulator of angiogenesis with possible therapeutic applications.