In a search of new, small leucine-rich repeat proteoglycan/protein (SLRP) family members, a novel gene, nephrocan (NPN), has been identified. The gene consists of three exons, and based on the deduced amino acid sequence, NPN has 17 leucine-rich repeat motifs and unique cysteine-rich clusters both in the N and C termini, indicating that this gene belongs to a new class of SLRP family. NPN mRNA was predominantly expressed in kidney in adult mice, and during mouse embryogenesis, the expression was markedly increased in 11-day-old embryos at a time when early kidney development takes place. In the adult mouse kidney, NPN protein was located in distal tubules and collecting ducts. When NPN was overexpressed in cell culture, the protein was detected in the cultured medium, and upon treatment with N-glycosidase F, the molecular mass was lowered by approximately 14 kDa, indicating that NPN is a secreted N-glycosylated protein. Furthermore, transforming growth factor-beta (TGF-beta)-responsive 3TP promoter luciferase activity was down-regulated, and TGF-beta-induced Smad3 phosphorylation was also inhibited by NPN, suggesting that NPN suppresses TGF-beta/Smad signaling. Taken together, NPN is a novel member of the SLRP family that may play important roles in kidney development and pathophysiology by functioning as an endogenous inhibitor of TGF-beta signaling.