Chondromodulin-I (ChM-I) is a 20-25 kDa anti-angiogenic glycoprotein in cartilage matrix. In the present study, we identified a novel 14-kDa species of ChM-I by immunoblotting, and purified it by immunoprecipitation with a newly raised monoclonal antibody against ChM-I. The N-terminal amino acid sequencing indicated that it was an N-terminal truncated form of ChM-I generated by the proteolytic cleavage at Asp37-Asp38. This 14-kDa ChM-I was shown by the modified Boyden chamber assay to have very little inhibitory activity on the VEGF-A-induced migration of vascular endothelial cells in contrast to the intact 20-25 kDa form of ChM-I (ID50 = 8 nM). Immunohistochemistry suggested that 20-25 kDa ChM-I was exclusively localized in the avascular zones, i.e. the resting, proliferating, and prehypertrophic zones, of the cartilaginous molds of developing long bone, whereas the 14-kDa form of ChM-I was found in hypertrophic and calcified zones. Immunoblotting demonstrated that mature growth-plate chondrocytes isolated from rat costal cartilage actively secrete ChM-I almost exclusively as the intact 20-25 kDa form into the medium in primary culture. Taken together, our results suggest that intact 20-25 kDa ChM-I is stored as a component of extracellular matrix in the avascular cartilage zones, but it is inactivated by a single N-terminal proteolytic cleavage in the hypertrophic zone of growth-plate cartilage.