Endostatin, a C-terminal fragment of collagen XVIII, binds to TG-2 (transglutaminase-2) in a cation-dependent manner. Recombinant human endostatin binds to TG-2 with an affinity in the nanomolar range (Kd=6.8 nM). Enzymatic assays indicated that, in contrast with other extracellular matrix proteins, endostatin is not a glutaminyl substrate of TG-2 and is not cross-linked to itself by the enzyme. Two arginine residues of endostatin, Arg27 and Arg139, are crucial for its binding to TG-2. They are also involved in the binding to heparin [Sasaki, Larsson, Kreuger, Salmivirta, Claesson-Welsh, Lindahl, Hohenester and Timpl (1999) EMBO J. 18, 6240-6248], and to alpha5beta1 and alphavbeta3 integrins [Faye, Moreau, Chautard, Jetne, Fukai, Ruggiero, Humphries, Olsen and Ricard-Blum (2009) J. Biol. Chem. 284, 22029-22040], suggesting that endostatin is not able to interact simultaneously with TG-2 and heparan sulfate, or with TG-2 and integrins. Inhibition experiments support the hypothesis that the GTP-binding site of TG-2 is a potential binding site for endostatin. Endostatin and TG-2 are co-localized in the extracellular matrix secreted by endothelial cells under hypoxia, which stimulates angiogenesis. This interaction, occurring in a cellular context, might participate in the concerted regulation of angiogenesis and tumorigenesis by the two proteins.