TSG-6 cDNA was isolated by differential screening of a lambda cDNA library prepared from tumor necrosis factor (TNF)-treated human diploid FS-4 fibroblasts. We show that TSG-6 mRNA was not detectable in untreated cells, but became readily induced by TNF in normal human fibroblast lines and in peripheral blood mononuclear cells. In contrast, TSG-6 mRNA was undetectable in either control or TNF-treated human vascular endothelial cells and a variety of tumor-derived or virus-transformed cell lines. The sequence of full-length TSG-6 cDNA revealed one major open reading frame predicting a polypeptide of 277 amino acids, including a typical cleavable signal peptide. The NH2-terminal half of the predicted TSG-6 protein sequence shows a significant homology with a region implicated in hyaluronate binding, present in cartilage link protein, proteoglycan core proteins, and the adhesion receptor CD44. The most extensive sequence homology exists between the predicted TSG-6 protein and CD44. Western blot analysis with an antiserum raised against a TSG-6 fusion protein detected a 39-kD glycoprotein in the supernatants of TNF-treated FS-4 cells and of cells transfected with TSG-6 cDNA. Binding of the TSG-6 protein to hyaluronate was demonstrated by coprecipitation. Our data indicate that the inflammatory cytokine (TNF or IL-1)-inducible, secretory TSG-6 protein is a novel member of the family of hyaluronate binding proteins, possibly involved in cell-cell and cell-matrix interactions during inflammation and tumorigenesis.