The oncogenic roles of PDGF-D and its proteolytic activator, matriptase, have been strongly implicated in human prostate cancer. Latent full-length PDGF-D (FL-D) consists of a CUB domain, a growth factor domain (GFD), and the hinge region in between. Matriptase processes the FL-D dimer into a GFD dimer (GFD-D) in a stepwise manner, involving generation of a hemidimer (HD), an intermediate product containing one FL-D subunit and one GFD subunit. Although the HD is a pro-growth factor that can be processed into the GFD-D by matriptase, the HD can also act as a dominant-negative ligand that prevents PDGF-B-mediated β-PDGF receptor activation in fibroblasts. The active GFD-D can be further cleaved into a smaller and yet inactive form if matriptase-mediated proteolysis persists. Through mutagenesis and functional analyses, we found that the R(340)R(341)GR(343)A (P4-P1/P1') motif within the GFD is the matriptase cleavage site through which matriptase can deactivate PDGF-D. Comparative sequence analysis based on the published crystal structure of PDGF-B predicted that the matriptase cleavage site R(340)R(341)GR(343)A is within loop III of the GFD, a critical structural element for its binding with the β-PDGF receptor. Interestingly, we also found that matriptase processing regulates the deposition of PDGF-D dimer species into the extracellular matrix (ECM) with increased binding from the FL-D dimer, to the HD, and to the GFD-D. Furthermore, we provide evidence that R(340)R(341)GR(343)A within the GFD is critical for PDGF-D deposition and binding to the ECM. In this study, we report a structural element crucial for the biological function and ECM deposition of PDGF-D and provide molecular insight into the dynamic functional interplay between the serine protease matriptase and PDGF-D.