Transforming growth factor-beta 1 (TGF-beta 1) is secreted as a latent complex, which consists of latency-associated peptide (LAP) and the mature ligand. The release of the mature ligand from LAP usually occurs through conformational change of the latent complex and is therefore considered to be the first step in the activation of the TGF-beta signaling pathway. So far, factors such as heat, pH changes, and proteolytic cleavage are reportedly involved in this activation process, but the precise molecular mechanism is still far from clear. Identification and characterization of the cell surface proteins that bind to LAP are important to our understanding of the latent TGF-beta activation process. In this study, we have identified heat shock protein 90 beta (HSP90 beta) from the cell surface of the MG63 osteosarcoma cell line as a LAP binding protein. We have also found that MG63 cells secrete HSP90 beta into extracellular space which inhibits the activation of latent TGF-beta 1, and that there is a subsequent decrease in cell proliferation. TGF-beta 1 -mediated stimulation of MG63 cells resulted in the increased cell surface expression of HSP90 beta. Thus, extracellular HSP90 beta is a negative regulator for the activation of latent TGF-beta 1 modulating TGF-beta signaling in the extracellular domain. Published by Elsevier Inc.