The NTR domain of WFIKKN1 protein has been shown to have significant affinity for the prodomain regions of promyostatin and latent myostatin but the biological significance of these interactions remained unclear. In view of its role as a myostatin antagonist, we tested the assumption that WFIKKN1 inhibits the release of myostatin from promyostatin and/or latent myostatin. WFIKKN1 was found to have no effect on processing of promyostatin by furin, the rate of cleavage of latent myostatin by BMP1, however, was significantly enhanced in the presence of WFIKKN1 and this enhancer activity was superstimulated by heparin. Unexpectedly, WFIKKN1 was also cleaved by BMP1 and our studies have shown that the KKN1 fragment generated by BMP1‐cleavage of WFIKKN1 contributes most significantly to the observed enhancer activity. Analysis of a pro‐TGF‐β ‐based homology model of homodimeric latent myostatin revealed that the BMP1‐cleavage sites are buried and not readily accessible to BMP1. In view of this observation, the most plausible explanation for the BMP1‐enhancer activity of the KKN1 fragment is that it shifts a conformational equilibrium of latent myostatin from the closed circular structure of the homodimer to a more open form, making the cleavage sites more accessible to BMP1. On the other hand, the observation that the enhancer activity of KKN1 is superstimulated in the presence of heparin is explained by the fact KKN1, latent myostatin, and BMP1 have affinity for heparin and these interactions with heparin increase the local concentrations of the reactants thereby facilitating the action of BMP1.EnzymesFurin: EC 3.4.21.75; BMP1, bone morphogentic protein 1 or procollagen C‐endopeptidase: EC 3.4.24.19.