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The quiescent vascular system in the adult body represents the imbalanced net outcome of overproduction of endogenous angiogenesis inhibitors and reduced levels of angiogenic factors. While some endogenous inhibitors are expressed under physiological conditions, they can also be generated in association with tumor growth. Angiostatin is such a specific angiogenesis inhibitor produced by tumors. It inhibits primary and metastatic tumor growth by blocking tumor angiogenesis. Having demonstrated potent antitumor activity in animal studies, angiostatin is now in clinical trials for human cancer therapy. Angiostatin is not a novel protein molecule coded by novel DNA sequences. Instead, it is an internal proteolytic fragment of a known protein, plasminogen. Surprisingly, most kringle domains of plasminogen only inhibit angiogenesis when cleaved as fragments from their parent protein that lacks antiangiogenic activity. These findings suggest that they are cryptic fragments hidden in large protein molecules. Thus, proteolytic processing plays a critical role in down-regulation of angiogenesis. Despite proteolytic processing, the antiangiogenic mechanism of angiostatin remains an enigma. Without knowing the mechanisms, it is difficult to predict the ultimate outcome of ongoing clinical trials. In this article, we discuss what is known about angiostatin and how this molecule specifically inhibits angiogenesis. We hope that the information will be useful for further development of angiostatin and its related inhibitors as therapeutic agents.