Defective function of anosmin-1, the protein encoded by KAL-1, underlies X-linked Kallmann's syndrome (X-KS), a human hereditary developmental disorder. Anosmin-1 appears to play a role in neurite outgrowth and axon branching, although molecular mechanisms of its action are still unknown. Anosmin-1 contains a WAP (whey acidic protein-like) domain and four contiguous FnIII (fibronectin-like type III) repeats; its WAP domain shows similarity to known serine protease inhibitors, whereas the FnIII domains contain HS (heparan sulphate)-binding sequences. To investigate the functional role of these domains, we have generated both wild-type and mutant recombinant anosmin-1 proteins using a Drosophila S2 cell expression system. Here we present the first biochemical evidence demonstrating the high-binding affinity between HS and anosmin-1, as measured by SPR (surface plasmon resonance) (K(d)=2 nM). The FnIII domains, particularly the first, are essential for dose-dependent HS binding and HS-mediated cell surface association. Furthermore, we have identified uPA (urokinase-type plasminogen activator) as an anosmin-1 interactant. Anosmin-1 significantly enhances the amidolytic activity of uPA in vitro; and anosmin-1-HS-uPA co-operation induces cell proliferation in the PC-3 prostate carcinoma cell line. Both the HS interaction and an intact WAP domain are required for the mitogenic activity of anosmin-1. These effects appear to be mediated by a direct protein interaction between anosmin-1 and uPA, since anosmin-1-uPA could be co-immunoprecipitated from PC-3 cell lysates, and their direct binding with high affinity (K(d)=6.91 nM) was demonstrated by SPR. We thus propose that anosmin-1 may modulate the catalytic activity of uPA and its signalling pathway, whereas HS determines cell surface localization of the anosmin-1-uPA complex.