A novel Mr 17,000 heparin-binding protein was purified from culture medium conditioned by A431 human epidermoid carcinoma cells. This protein, designated HBp17, was found to bind the heparin-binding peptide growth factors HBGF-1 and HBGF-2 in a noncovalent, reversible manner. In addition HBp17 was found to inhibit the biological activities of both HBGF-1 and HBGF-2. Both the binding and inactivation of HBGF-1 and HBGF-2 by HBp17 were abolished by heparin. Full-length 1163-base pair HBp17 cDNA was cloned and sequenced by using the polymerase chain reaction technique. The deduced primary structure of HBp17 consisted of 234 amino acids including each of five partial peptide sequences obtained from proteolytic fragments of purified HBp17. The encoded protein included a 33-residue N-terminal signal sequence for secretion and a single potential N-linked glycosylation site. No homology with any known protein was found for the deduced primary structure of HBp17. The expression of HBp17 mRNA was found to occur preferentially in normal human keratinocytes and in squamous cell carcinomas. This pattern of HBp17 gene expression suggests that this binding protein for HBGFs 1 and 2 has a physiological role in squamous epithelia.