Whey-acidic-protein (WAP) four-disulphide core (WFDC) proteins have important roles in the regulation of innate immunity, anti-microbial function, and the inhibition of inflammatory proteases at mucosal surfaces. It was recently demonstrated that the WFDC protein, prostate stromal 20 (ps20), encoded by the WFDC1 gene, is a potent growth inhibitory factor, and shares with other WFDC proteins the ability to modulate wound healing processes and immune responses to viral infections. However, ps20 remains relatively uncharacterised at the protein level. Using a panel of ps20 antibodies for western-blotting (WB), ELISA and immunoaffinity purification, we isolated, biochemically characterised and tested ps20 preparations for three biological properties: (i) interactions with glycosaminoglycans (GAG) (ii) inhibition of cell proliferation, and (iii) transglutaminase2 (TG2) mediated crosslinking of ps20 to fibronectin, a process implicated in wound healing. We show herein that ps20 preparations contain multiple molecular forms including full-length ps20 (resolving at ≈27 kDa), an exon 3 truncated form (≈22 kDa) that lacks aa113-140, and variable amounts of a putatively cleaved lower MW (≈15-17 kDa) species. Untagged purified ps20 preparations containing a mixture of these forms are biologically active in significantly suppressing prostate cell proliferation. We show that one mechanism by which lower LMW forms of ps20 arise is through cathepsin L (CL) cleavage, and confirm that CL cleaves ps20 at the C-terminus, but this does not inhibit its growth inhibitory function. However, CL cleavage abrogated the interaction between ps20 and solid-phase fibronectin. Therefore, we demonstrate for the first time that LMW forms of ps20 that lack a C-terminal immunogenic epitope can arise through CL cleavage and this cleavage impairs multimerisation and potential capacity to cross-link to ECM, but not the capacity of ps20 to inhibit cell proliferation. We propose that ps20 like other WFDC proteins can become associated with GAGs and the ECM. Furthermore, we suggest post-translational processing and cleavage of ps20 is required to generate functional protein species, and TG2 mediated crosslinking and CL cleavage form components of a ps20 regulatory apparatus.