Vasohibin-1 (VASH1) is an angiogenesis inhibitor synthesized by endothelial cells (ECs) under conditions associated with physiological and pathological angiogenesis including cancers. VASH1, which is a 44-kDa protein, is processed after its translation and secretion, and a 29 kDa product cleaved both N-terminal and C-terminal end loses its anti-angiogenic activity. Here, we tested whether cancer cells modulate the processing of VASH1. When mouse EC line MS1 stably overexpressing the human VASH1 gene (MS1-hVASH1) and various cancer cell lines were co-cultured, there was an increased processing of hVASH1 protein in the culture media. This augmented processing was abrogated by a general cysteine protease inhibitor, E-64, and also by a specific calpain inhibitor, MDL28170. Recombinant hVASH1 protein was degraded by μ-calpain in vitro, which degradation was blocked by calpeptin. Conditioned media from co-cultures had little effect on the migration of human umbilical vein endothelial cells, but exhibited an inhibitory effect on their migration when collected in the presence of MDL28170; and this inhibitory effect was blocked by neutralizing anti-hVASH1 mAb. These results indicate that cancer cells proteolytically inactivate VASH1 protein secreted by ECs in the tumour microenvironment.