We have identified and cloned a fetal liver cDNA encoding a new serine proteinase that has been called matriptase-2. This protein exhibits a domain organization similar to other members of an emerging family of membrane-bound serine proteinases known as type II transmembrane serine proteinases. Matriptase-2 contains a short cytoplasmic domain, a type II transmembrane sequence, a central region with several modular structural domains including two CUB (complement factor C1s/C1r, urchin embryonic growth factor, bone morphogenetic protein) domains and three low density lipoprotein receptor tandem repeats, and finally, a C-terminal catalytic domain with all typical features of serine proteinases. The human matriptase-2 gene maps to 22q12-q13, a location that differs from all type II transmembrane serine proteinase genes mapped to date. Immunofluorescence and Western blot analysis of COS-7 cells transfected with the isolated cDNA confirmed that matriptase-2 is anchored to the cell surface. Matriptase-2 was expressed in Escherichia coli, and the purified recombinant protein hydrolyzed synthetic substrates used for assaying serine proteinases and endogenous proteins such as type I collagen, fibronectin, and fibrinogen. Matriptase-2 could also activate single-chain urokinase plasminogen activator, albeit with low efficiency. These activities were abolished by inhibitors of serine proteinases but not by inhibitors of other classes of proteolytic enzymes. Northern blot analysis demonstrated that matriptase-2 transcripts are only detected at significant levels in both fetal and adult liver, suggesting that this novel serine proteinase may play a specialized role in matrix remodeling processes taking place in this tissue during development or in adult tissues.