Tissue transglutaminase belongs to the multigene transglutaminase family of Ca2+-dependent protein cross-linking enzymes. Unlike other transglutaminases, it is involved in cell-matrix interactions and serves as an adhesion co-receptor for fibronectin. Previous work established that the fibronectin-binding motif(s) is located within the NH2-terminal proteolytic fragment of the protein consisting of residues 1-272. Here we identify a novel fibronectin recognition site within this sequence of tissue transglutaminase. Substitution of individual domains of tissue transglutaminase with those from homologous factor XIIIA showed that the major fibronectin-binding site is present within the first beta-sandwich domain of the protein. Experiments with deletion mutants of the first domain revealed that amino acids 81-140 of tissue transglutaminase are involved in fibronectin binding. Using synthetic peptides encompassing this region, we found that the peptide 88WTATVVDQQDCTLSLQLTT106 inhibited the interaction of tissue transglutaminase with fibronectin and decreased transglutaminase-dependent cell adhesion and spreading. In the three-dimensional structure of the first domain, amino acids 88-106 comprise an extended hairpin formed by antiparallel beta strands 5 and 6. Mutations of Asp94 and Asp97 within the beta5/beta6 hairpin to Ala significantly reduced the affinity of tissue transglutaminase for fibronectin, indicating that these residues are critical for fibronectin binding. Identification of the fibronectin-binding site on tissue transglutaminase will help to dissect the role of this protein in cell-matrix interactions.