Pregnancy-specific glycoproteins (PSGs) are a family of Ig-like proteins secreted by specialized placental cells. The PSG1 structure is composed of a single Ig variable region-like N-terminal domain and three Ig constant region-like domains termed A1, A2, and B2. Members of the human and murine PSG family have been shown to induce anti-inflammatory cytokines from monocytes and macrophages and to stimulate angiogenesis. We recently showed that recombinant forms of PSG1 (PSG1-Fc and PSG1-His) and PSG1 purified from the serum of pregnant women are associated with the immunoregulatory cytokine TGF-β1 and activated latent TGF-β1. Here, we sought to examine the requirement of specific PSG1 domains in the activation of latent TGF-β1. Plasmon surface resonance studies showed that PSG1 directly bound to the small latent complex and to the latency-associated peptide of TGF-β1 and that this binding was mediated through the B2 domain. Furthermore, the B2 domain alone was sufficient for activating the small latent complex. In separate experiments, we found that the PSG1-mediated induction of TGF-β1 secretion in macrophages was dependent on the N-terminal domain. Mutagenesis analysis revealed that four amino acids (LYHY) of the CC' loop of the N-terminal domain were required for induction of latent TGF-β1 secretion. Together, our results show that two distinct domains of PSG1 are involved in the regulation of TGF-β1 and provide a mechanistic framework for how PSGs modulate the immunoregulatory environment at the maternal-fetal interface for successful pregnancy outcome.