The extracellular matrix protein BM-40 (osteonectin, SPARC) has recently been shown to be a major target for transglutaminase-catalyzed cross-linking in differentiating cartilage. In the present study we demonstrate that recombinant human BM-40 can be modified with [3H]putrescine in a 1:1 molar ratio by transglutaminaseC (tissue transglutaminase). Residues Gln3 and Gln4 were identified as major amine acceptor sites. This was confirmed with several mutant proteins, including deletions in the N-terminal domain I of BM-40, site-directed mutagenesis of the reactive glutamines, and fusion of the seven-amino acid-long N-terminal sequence (APQQEAL) to an unrelated protein. The results showed that the N-terminal target site is sufficient for modification by transglutaminase but at a low level. For high efficiency amine incorporation an intact domain I is required. The conservation of at least one of the transglutaminase target glutamines in the known vertebrate BM-40 sequences and their absence in an invertebrate homologue point to an important, but yet unknown, role of this modification in vertebrates.