IGF-I and IGF-II are growth-stimulating peptides with strong mitogenic properties. These polypeptide growth factors circulate in serum bound to specific binding proteins. We report the cloning and complete sequence of a cDNA encoding a low mol. wt IGF-binding protein from a human placenta cDNA library. We propose the designation IGF-binding protein 1 (IBP-1) for the gene and corresponding protein. Expression of the cDNA encoding IBP-1 in COS cells resulted in the synthesis of a 30-kd protein which binds IGF-I and is immunologically indistinguishable from the IGF-binding protein isolated from amniotic fluid or human serum. Northern blotting analysis demonstrated that expression of the IBP-1 gene is highly tissue specific and limited to placental membranes and fetal liver suggesting a rigid control. The IBP-1 gene is a single copy gene, located on chromosome 7. The results obtained suggest that most, if not all, lower mol. wt IGF-binding proteins originate from this gene.