The AON epitope of secreted protein acidic and rich in cysteine (SPARC) is a conserved motif expressed by human SPARC in a variety of human cell types. Through the use of a monoclonal antibody that recognizes this epitope, transitional epithelium was found to restrict expression of SPARC to the suprabasal and intermediate layer. Such intracellular expression was defined by immunoreactive signals that localized to the apical plasma membranes of suprabasal and intermediate cells. Polarization of SPARC to apical plasma membranes of suprabasal cells was retained in vitro by a subpopulation of cells that exhibited characteristics of suprabasal cells—cell-cycle quiescence, large cell volumes, and multiple nuclei. In contrast, the basal layer of transitional epithelium in vivo and cycling cells in vitro did not exhibit this apical staining pattern, but instead sequestered the SPARC polypeptide within urothelial cytoplasm and/or nuclei, as revealed by immunohistochemical analysis. Elution of soluble proteins and DNA from urothelial cells revealed the presence of SPARC within the nuclear matrix—and that SPARC colocalized with the nuclear matrix Ki-67 antigen. rSPARC activity was demonstrated and quantified with a rounding assay whereby the spreading of freshly plated cells was inhibited by recombinant SPARC in a concentration- and time-dependent manner. Inhibition of spreading was observed in urothelial cells derived from endoderm (bladder) and mesoderm (ureter) germ layers. Statistically significant differences were seen between urothelial cells from these two layers. Mesodermal cells recovered more slowly from the inhibitory effects of rSPARC, such that at hour 6 endodermal cells underwent significantly more spreading, as shown by a rounding index (RI). These experiments provide new insights about the matricellular trafficking of SPARC and suggest that intra- and extra-cellular localization patterns influence the development, homeostasis, and differentiation of transitional epithelium. © 2004 Wiley-Liss, Inc.