EP is a mesenchyme derived 289-aminoacid protein and plays a crucial role in epithelial tube formation during branching morphogenesis of the lung and other organs (Hirai,Cell:vol 69, 1992). However, mechanism of EP action is unknown. Major obstacles to examining EP-epithelial interaction include the extreme hydrophobicity of EP molecule. The cellular binding domain is within the midsection of EP peptide. Identifying the domain aminoacid sequence will help studying EP interaction with the target cells. We generated fusion proteins and synthesized peptide fragments corresponding the aminoacid sequences of the midsection, (A)105-114, (B)106-119, (C)110-118, (D)136-145,(E)145-154, (F)155-164. Histidine × 6(Hisx6) fused with EP 105-173 fragment remained hydrophobic but maintained the full cell attaching activity when dissolved in 1% formic acid, coated onto plastic dishes and incubated with mouse embryonic epithelial Pam cells. Glutathione S transferase (GST) fusion protein with 105-173 fragment had lower hydrophobicity and had similar cell attachment activity as Hisx6 fusion protein and,when radioiodinated, bound to a single class of sites of intact Pam cell surface at dissociation constant (Kd) 5.6 nM. 125I-tyrosine-Peptide B bound with the same Kd, but 125I-tyrosine-D,E or F did not bind to the cell surfface. Similarly, aminoacid fragments D,E or F did not inhibit125 I-tyrosine-peptide B binding to Pam cells, whereas A and C fragments did partially. All the synthetic peptides were hydrophilic, but only peptide B promoted Pam cell attachment similarly to the Hisx6 or GST fusion proteins. Peptides A and C were only partially effective in cell attaching, whereas D,E, or F had no cell attachment activity. These results indicate that 14 aminoacid-peptide B containis a full binding domain of EP and binds to a single class of sites of target cells. Next, we examined if peptide B influence branching morphogenesis when added in embryonic mouse lung explant in chemically defined medium, since a larger EP fragment of this region has alleged inhibitory activity. At embryonic day 12 stage (E12), Peptide B at any concentration (0.01-5 μg/500 μl/well) did not suppress branching or lung lumen formation and in vitro morphological progression was similar to untreated controls at 48 h culture. It is speculated that occupation of putative EP receptor by 14 aminoacid peptide does not by itself effect epithelial changes and that other region(s) of EP molecule is essential for epithelial cell differentiation.