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Pigment epithelium-derived factor (PEDF), an angiogenesis inhibitor with multiple other functions, balances angiogenesis in the eye and blocks tumor progression. Retinoblastoma, an angiogenesis-dependent tumor, is the most common ocular cancer in children without effective treatment. It has been reported that PEDF can induce neuronal differentiation of retinoblastoma cells; however, its anti-angiogenic potential for inhibition of retinoblastoma growth in vivo has not been elucidated. The present study was designed to investigate the effect of PEDF on growth of retinoblastoma and the possible molecular mechanism. Soluble and non-fusion recombinant PEDF were generated in E. coli. Recombinant PEDF dose-dependently inhibited proliferation and induced apoptosis of endothelial cells. PEDF had no effects on the proliferation and apoptosis of retinoblastoma cell line SO-Rb50. Intraperitoneal injection of PEDF resulted in growth inhibition of heterotopic retinoblastoma xenografts at 68.78%. MVD in tumor tissues treated with PEDF was significantly decreased. These results suggested that PEDF suppressed tumor growth by blocking angiogenesis instead of a direct cytotoxic effect on tumor cells. Vascular endothelial growth factor (VEGF), a major angiogenic stimulator, was down-regulated by PEDF in both SO-Rb50 cells and retinoblastoma xenografts. Hypoxia-inducible factor (HIF)-1α, a crucial transcriptional factor for VEGF expression, was also down-regulated by PEDF both in vitro and in vivo. PEDF reduced HIF-1α nuclear translocation, which may be responsible for the down-regulation of VEGF. Down-regulation of VEGF expression in tumor cells through inhibiting HIF-1α, thus attenuating the paracrine effect of VEGF on endothelial cell proliferation and vascular permeability in tumor tissues, may represent a mechanism for the anti-angiogenic activity of PEDF. (Cancer Sci 2009; 100: 2419–2425)