Midkine (MK) is a retinoic acid response cytokine, mostly expressed in embryonic tissues. Aberrant expression of MK was found in numerous cancers. In human, a truncated MK was expressed specifically in tumor/cancer tissues. Here we report the discovery of a novel truncated form of MK transiently expressed during normal mouse embryonic development. In addition, MK is concentrated at the interface between developing epithelium and mesenchyme as well as highly proliferating cells. Its expression, which is closely coordinated with angiogenesis and vasculogenesis, is spatiotemporally regulated with peaks in extensive organogenesis period and undifferentiated cells tailing off in maturing cells, implying its role in nascent blood vessel (endothelial) signaling of tissue differentiation and stem cell renewal/differentiation. Cloning and sequencing analysis revealed that the embryonic truncated MK, in which the conserved domain is in-frame deleted, presumably producing a novel secreted small peptide, is different from the truncated form in human cancer tissues, whose deletion results in a frame-shift mutation. Our data suggest that MK may play a role in epithelium-mesenchyme interactions, blood vessel signaling, and the decision of proliferation vs differentiation. Detection of the transiently expressed truncated MK reveals its novel function in development and sheds light on its role in carcinogenesis.