Thrombospondin-2 (TSP2) is an anti-angiogenic matricellular protein that inhibits tumor growth and angiogenesis. Tumor-associated blood vascular endothelial cells (BECs) were isolated from human invasive bladder cancers and from matched normal bladder tissue by immuno-laser capture microdissection. Exon expression profiling analyses revealed a particularly high expression of a short TSP2 transcript containing only the last 9 (3') exons of the full-length TSP2 transcript. Using 5' and 3' RACE (rapid amplification of cDNA ends) and Sanger sequencing, we confirmed the existence of the shorter transcript of TSP2 (sTSP2) and determined its sequence which completely lacked the anti-angiogenic thrombospondin type 1 repeats domain. The largest open reading frame predicted within the transcript comprises 209 amino acids and matches almost completely the C-terminal lectin domain of full-length TSP2. We produced recombinant sTSP2 and found that unlike the full-length TSP2, sTSP2 did not inhibit vascular endothelial growth factor-A-induced proliferation of cultured human BECs, but in contrast when combined with TSP2 blocked the inhibitory effects of TSP2 on BEC proliferation. In vivo studies with stably transfected A431 squamous cell carcinoma cells revealed that full-length TSP2, but not sTSP2, inhibited tumor growth and angiogenesis. This study reveals that the transcriptional program of tumor stromal cells can change to transcribe a new version of an endogenous angiogenesis inhibitor that has lost its anti-angiogenic activity.