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Imaginal disc growth factor-2 (IDGF-2) is a member of a recently described family of Drosophila melanogaster-soluble polypeptide growth factors that promote cell proliferation in imaginal discs. Although their precise mode of action has not been established, IDGFs cooperate with insulin in stimulating the growth of imaginal disc cells. We report the crystal structure of IDGF-2 at 1.3-Å resolution. The structure shows the classical (βα)₈ barrel-fold of family 18 glycosyl hydrolases, with an insertion of an α + β domain similar to that of Serratia marcescens chitinases A and B. However, amino acid substitutions in the consensus catalytic sequence of chitinases give IDGF-2 a less negatively charged environment in its putative ligand-binding site and preclude the nucleophilic attack mechanism of chitin hydrolysis. Particularly important is the replacement of Glu by Gln at position 132, which has been shown to abolish …