Tissue inhibitors of metalloproteinases (TIMPs) while originally characterized as inhibitors of matrix metalloproteinases (MMPs) have recently been shown to have a wide range of functions that are independent of their MMP inhibitory properties. Tissue inhibitor of metalloproteinases-3 (TIMP-3) is a potent inhibitor of VEGF-mediated angiogenesis and neovascularization through its ability to block the binding of VEGF to its receptor VEGFR-2. To identify and characterize the anti-angiogenic domain of TIMP-3, structure function analyses and synthetic peptide studies were performed using VEGF-mediated receptor binding, signaling, migration and proliferation. In addition, the ability of TIMP-3 peptides to inhibit CNV in a mouse model was evaluated. We demonstrate that the anti-angiogenic property resides in the COOH-terminal domain of TIMP-3 protein which can block the binding of VEGF specifically to its receptor VEGFR-2, but not to VEGFR-1 similar to the full-length wild-type protein. Synthetic peptides corresponding to putative loop 6 and tail region of TIMP-3 have anti-angiogenic properties as determined by inhibition of VEGF binding to VEGFR-2, VEGF-induced phosphorylation of VEGFR-2 and downstream signaling pathways as well as endothelial cell proliferation and migration in response to VEGF. In addition, we show that intravitreal administration of TIMP-3 peptide could inhibit the size of laser-induced choroidal neovascularization lesions in mice. Thus, we have identified TIMP-3 peptides to be efficient inhibitors of angiogenesis and have a potential to be used therapeutically in diseases with increased neovascularization.