Abstract The oncogenic roles of platelet-derived growth factor D (PDGF-D) and its proteolytic activator, matriptase, have been strongly implicated in human prostate cancer. The latent full-length PDGF-D consists of N-terminal CUB domain, C-terminal growth factor domain, and hinge region in between. Matriptase processes the full-length PDGF-D dimer (FL-D) into PDGF-D growth factor domain dimer (GFD-D) in a step-wise manner, involving generation of hemidimer (HD), which is an intermediate product containing one full-length PDGF-D subunit and one growth factor domain subunit. In this study, we showed that HD acts as a dominant-negative ligand of PDGF/PDGFR signaling in fibroblasts whereas it has its own unique function in pre-osteoclasts. The regulation of PDGF-D's activity by matriptase is biphasic as demonstrated by the event that active PDGF-D GFD-D can be further cleaved into a smaller and yet inactive form if the enzymatic action of matriptase persists. By mutagenesis analyses, we identified amino acid residues R340R341GR343A at the C-terminus of PDGF-D growth factor domain to be the matriptase cleavage site through which PDGF-D is inactivated. Based on the sequence analysis in comparison with the published crystal structure of PDGF-B, we suggest that R340R341GR343A is within the loop III of PDGF-D growth factor domain, a critical domain for its binding to the PDGF receptor. When the positively charged arginine residues of R340R341GR343A were mutated to alanine residues, PDGF-D GFD-D lost its biological activity in activating β-PDGFR. Further, we found that proteolytic processing of latent PDGF-D to remove CUB domain and hinge region is tightly linked with the storage of PDGF-D GFD-D within extracellular matrix (ECM) in vitro. These results indicate the increased affinity to the ECM from FL-D, HD, to GFD-D and also suggest that CUB domain and hinge region of PDGF-D prevent the sequestration of PDGF-D in ECM. Interestingly, the matriptase cleavage site R340R341GR343A within the growth factor domain is also critical for PDGF-D association with ECM. Taken together, the present study reports structural elements crucial to the biologically function of PDGF-D and its association with ECM, suggesting that proteolytic processing is a crucial mechanism for PDGF-D to establish its tissue gradient. Citation Format: Wei Huang, Hyeong-Reh C. Kim. Matriptase-mediated proteolytic regulation of biological activity and spatial distribution of PDGF-D. [abstract]. In: Proceedings of the 105th Annual Meeting of the American Association for Cancer Research; 2014 Apr 5-9; San Diego, CA. Philadelphia (PA): AACR; Cancer Res 2014;74(19 Suppl):Abstract nr 4420. doi:10.1158/1538-7445.AM2014-4420