Pigment epithelium-derived factor (PEDF) is a 50-kDa protein encoded by a single gene that shows strong conservation across phyla from fish to mammals. It is secreted by the retinal pigment epithelium (RPE) and a select number of other cell types in the eye, as well as by other tissues in the body. PEDF was originally defined by its ability to induce differentiation in retinoblastoma cells. It also promotes a non-proliferative, differentiated state in a number of other cell types. PEDF protects retinal neurons from light damage, oxidative stress and glutamate excitotoxicity. PEDF is also antiangiogenic and can inhibit the growth of blood vessels in the eye induced in a variety of ways. A balance in the levels of PEDF and the proangiogenic factor vascular endothelial growth factor-A is perturbed in a range of retinal neovascular diseases. Some of the pathways by which PEDF exerts its actions on cells have now been defined. Peptide fragments of PEDF carry biological activity and may be valuable therapeutic agents that readily penetrate the eye. Copyright 2004 Elsevier Ltd.