Hepatocyte growth factor activator inhibitor-1 (HAI-1) is an integral membrane protein expressed on epithelial cells and contains two extracellular Kunitz domains (N-terminal KD1 and C-terminal KD2) known to inhibit trypsin-like serine proteases. In tumorigenesis and tissue regeneration, HAI-1 regulates the hepatocyte growth factor (HGF)/c-Met pathway by inhibiting the activity of HGF activator (HGFA) and matriptase, two serine proteases that convert pro-HGF into its biologically active form. By screening a placental cDNA library, we discovered a new splice variant of HAI-1 designated HAI-1B that contains an extra 16 amino acids adjacent to the C terminus of KD1. To investigate possible consequences on Kunitz domain function, a soluble form of HAI-1B (sHAI-1B) comprising the entire extracellular domain was produced. First, we found that sHAI-1B displayed remarkable enzyme specificity by potently inhibiting only HGFA (IC 50 ؍ 30.5 nM), matriptase (IC 50 ؍ 16.5 nM), and trypsin (IC 50 ؍ 2.4 nM) among 16 serine proteases examined, including plasminogen activators (urokinase-and tissue-type plasminogen activators), coagulation enzymes thrombin, factors VIIa, Xa, XIa, and XIIa, and activated protein C. Relatively weak inhibition was found for plasmin (IC 50 ؍ 399 nM) and plasma kallikrein (IC 50 ؍ 686 nM). Second, the functions of the KD1 and KD2 domains in sHAI-1B were investigated using P 1 residue-directed mutagenesis to show that inhibition of HGFA, matriptase, trypsin, and plasmin was due to KD1 and not KD2. Furthermore, analysis by reverse transcription-PCR demonstrated that HAI-1B and HAI-1 were co-expressed in normal tissues and various epithelial-derived cancer cell lines. Both isoforms were up-regulated in eight examined ovarian carcinoma specimens, three of which had higher levels of HAI-1B RNA than of HAI-1 RNA. Therefore, previously demonstrated roles of HAI-1 in various physiological and pathological processes likely involve both HAI-1B and HAI-1.Hepatocyte growth factor activator inhibitor-1 (HAI-1)1 is an integral cell surface protein of 66 kDa expressed on epithelial cells (1-3). HAI-1 is known to inhibit the enzymatic activity of HGF activator (HGFA) (1, 4) and matriptase (5-9), two trypsinlike serine proteases capable of converting the inactive singlechain form of hepatocyte growth factor (pro-HGF) (10 -14) into its biologically active two-chain form (HGF). When activated HGF binds to its receptor c-Met, it promotes phospho-transfer activity of the intracellular tyrosine kinase domain leading to activation of multiple intracellular signaling pathways. Therefore, as an inhibitor of HGFA and matriptase, HAI-1 may control the local generation of HGF and thus modulate the activity of the HGF/c-Met receptor system, which is involved in such biological processes as tissue regeneration, morphogenesis, and tumorigenesis (reviewed in Refs. 15-18).The activation of the HGF-converting enzymes represents yet another level of HGF/c-Met pathway regulation. Similar to the coagulation factors, HGFA is ma...