Midkine (MK) is a member of a family of developmentally regulated neurotrophic and heparin-binding growth factors. It is expressed during the midgestation period in a retinoid-acid dependent manner during embryogenesis in the mouse. In vitro, it promotes neurite outgrowth from spinal cord neurons and cell migration. It expression is strongest in the central nervous system, thus suggesting a function for this protein in neural development. In this study, the role of MK in synaptogenesis was examined in the Xenopus system. A Xenopus MK cDNA was cloned from an embryonic library encompassing neurulation and synaptogenesis stages. By Northern blot analysis, MK mRNA was detected from the onset of neurulation and throughout the stages of synaptogenesis in the Xenopus embryo. This suggests that MK is also an important growth regulator in Xenopus embryogenesis. To study the function of MK in the development of the neuromuscular junction (NMJ), fusion proteins were made and their ability to induce the formation of acetylcholine receptor (AChR) clusters in cultured muscle cells was studied. Beads coated with MK strongly induce AChR clustering. When nerve-muscle cocultures were labeled with antibodies made against the MK fusion protein, MK immunoreactivity was detected at the NMJ. Unlike heparin-binding growth-associated molecule (HB-GAM), another member of this growth factor family, MK expression cannot be detected in the muscle but is present in spinal cord neurites. Consistent with these in vitro data is the observation that MK mRNA is only localized in the central nervous system but the protein is deposited at the intersomitic junction where the NMJ is located in vivo. Exogenously applied MK does bind to the heparan sulfate proteoglycan on the surface of Xenopus muscle cells. Agrin, a heparan-sulfate proteoglycan that induces the formation of AChR clusters in cultured muscle cells, binds strongly to MK. Bath application of MK in conjunction with agrin results in a change in the pattern of AChR clustering induced by agrin alone. These data suggest that MK is a neuron-derived factor that participates in the signal transduction process during NMJ development.