Signal peptide CUB (complement proteins C1r/C1s, Uegf, and Bmp 1)-EGF domain-containing protein 2 (SCUBE2) is a secreted, membrane-associated multidomain protein composed of five recognizable motifs: an NH(2)-terminal signal peptide sequence, nine copies of epidermal growth factor (EGF)-like repeats, a spacer region, three cysteine-rich repeats, and one CUB domain at the COOH terminus. Our previous clinical study showed that SCUBE2 may act as a novel breast tumor suppressor gene and serve as a useful prognostic marker. However, the specific domain responsible for its tumor suppressor activity and the precise mechanisms of its anti-tumor effect remain unknown. Using a combination of biochemical, molecular, and cell biology techniques, we further dissected the molecular functions and signal pathways mediated by the NH(2)-terminal EGF-like repeats or COOH-terminal CUB domain of SCUBE2. Independent overexpression of the NH(2)-terminal EGF-like repeats or COOH-terminal CUB domain resulted in suppression of MCF-7 breast cancer cell proliferation and reduced MCF-7 xenograft tumor growth in nude mice. Molecular and biochemical analyses revealed that the COOH-terminal CUB domain could directly bind to and antagonize bone morphogenetic protein activity in an autocrine manner, whereas the NH(2)-terminal EGF-like repeats could mediate cell-cell homophilic adhesions in a calcium-dependent fashion, interact with E-cadherin (a master tumor suppressor), and decrease the β-catenin signaling pathway. Together, our data demonstrate that SCUBE2 has growth inhibitory effects through a coordinated regulation of two distinct mechanisms: antagonizing bone morphogenetic protein and suppressing the β-catenin pathway in breast cancer cells.