ABSTRACT: Carboxypeptidase E (CPE), an exopeptidase involved in proneuropeptide processing, is also a neurotrophic factor, named neurotrophic factor-?1 (NF-?1) and has important roles in neuroprotection, stem cell differentiation, and neurite outgrowth, independent of enzymatic activity. Additionally, an N-terminal-truncated CPE/NF-?1 variant, (CPE/NF-?1)-?N, proposed from bioinformatic analysis of GenBank (National Center for Biotechnology Information, Bethesda, MD, USA) DNA sequences and encoding a 40-kDa protein, has been found to be exclusively expressed in embryonic neurons. To investigate the function of (CPE/NF-?1)-?N in neurodevelopment, we first cloned (CPE/NF-?1)-?N transcripts from an embryonic mouse brain. A rapid amplification of cDNA ends assay, DNA sequencing, and Northern blot revealed 1.9- and 1.73-kb transcripts, which encoded 47- and 40-kDa (CPE/NF-?1)-?N proteins, respectively. Those proteins were expressed in embryonic mouse brain. Expression of the 2 (CPE/NF-?1)-?N mRNAs surged at embryonic d 10.5, correlating with the time of neurogenesis in the developing brain and also at postnatal d 1. HT22 cells, a mouse hippocampal cell line, transduced with 40 kDa (CPE/NF-?1)-?N up-regulated expression of genes involved in embryonic neurodevelopment: insulin-like growth factor binding protein 2 ( IGFBP2), death-associated protein 1, and ephrin A1, which regulate proliferation, programmed cell death, and neuronal migration, respectively. HT22 cells and embryonic cortical neurons overexpressing 40 kDa (CPE/NF-?1)-?N exhibited enhanced proliferation, which was inhibited by IGFBP2 short interfering RNA treatment. Thus, 40 kDa (CPE/NF-?1)-?N has an important, enzymatically independent role in the regulation of genes critical for neurodevelopment.-Xiao, L., Yang, X., Sharma, V. K., Loh, Y. P. Cloning, gene regulation, and neuronal proliferation functions of novel N-terminal-truncated carboxypeptidase E/neurotrophic factor-?l variants in embryonic mouse brain.