We analyzed expression of candidate genes encoding cell surface or secreted proteins in normal kidney and kidney cancer. This screen identified a bone morphogenetic protein (BMP) antagonist, SOSTDC1 (sclerostin domain-containing-1) as down-regulated in kidney tumors. To confirm screening results, we probed cDNA dot blots with SOSTDC1. The SOSTDC1 message was decreased in 20/20 kidney tumors compared with normal kidney tissue. Immunohistochemistry confirmed significant decrease of SOSTDC1 protein in clear cell renal carcinomas relative to normal proximal renal tubule cells (p < 0.001). Expression of SOSTDC1 was not decreased in papillary and chromophobe kidney tumors. SOSTDC1 was abundantly expressed in podocytes, distal tubules, and transitional epithelia of the normal kidney. Transfection experiments demonstrated that SOSTDC1 is secreted and binds to neighboring cells and/or the extracellular matrix. SOSTDC1 suppresses both BMP-7-induced phosphorylation of R-Smads-1, -5, and -8 and Wnt-3a signaling. Restoration of SOSTDC1 in renal clear carcinoma cells profoundly suppresses proliferation. Collectively, these results demonstrate that SOSTDC1 is expressed in the human kidney and decreased in renal clear cell carcinoma. Because SOSTDC1 suppresses proliferation of renal carcinoma cells, restoration of SOSTDC1 signaling may represent a novel target in treatment of renal clear cell carcinoma.