Tumor growth and metastasis require concomitant growth of new blood vessels, which are stimulated by angiogenic factors, including vascular endothelial growth factor (VEGF), secreted by most tumors. Whereas the angiogenic property and molecular mechanisms of VEGF have been well studied, the biological function of its related homolog, placenta growth factor (PlGF), is poorly understood. Here we demonstrate that PlGF-1, an alternatively spliced isoform of the PlGF gene, antagonizes VEGF-induced angiogenesis when both factors are coexpressed in murine fibrosarcoma cells. Overexpression of PlGF-1 in VEGF-producing tumor cells results in the formation of PlGF-1/VEGF heterodimers and depletion of the majority of mouse VEGF homodimers. The heterodimeric form of PlGF-1/VEGF lacks the ability to induce angiogenesis in vitro and in vivo. Similarly, PlGF-1/VEGF fails to activate the VEGFR-2-mediated signaling pathways. Further, PlGF-1 inhibits the growth of a murine fibrosarcoma by approximately 90% when PlGF-1-expressing tumor cells are implanted in syngeneic mice. In contrast, overexpression of human VEGF in murine tumor cells causes accelerated and exponential growth of primary fibrosarcomas and early hepatic metastases. Our data demonstrate that PlGF-1, a member of the VEGF family, acts as a natural antagonist of VEGF when both factors are synthesized in the same population of cells. The underlying mechanism is due to the formation of functionally inactive heterodimers.