Neuropilin is an essential cell surface receptor that functions in both semaphorin-dependent axon guidance and vascular endothelial growth factor (VEGF)-dependent angiogenesis. The interplay between these two seemingly distinct pathways is a source of considerable interest. Indeed, several semaphorin family members have been shown to have potent anti-angiogenic activity in vivo. However, reports about whether semaphorin and VEGF competitively bind to neuropilin conflict. Previous work has demonstrated that all known ligands and inhibitors of neuropilin interact with the b1 domain of neuropilin via a C-terminal arginine. No semaphorin family member possesses a C-terminal arginine, leading to uncertainty with regard to the physical mechanism of interaction between the C-terminal domain of semaphorin and the b1 domain of neuropilin. Semaphorin 3F (Sema3F) possesses an RXRR furin recognition site in its C-terminus, and we demonstrate that it is proteolytically processed. This processing is found to be essential for the interaction of the C-terminus of Sema3F with the b1 domain of neuropilin. We further demonstrate that furin activation of the C-terminus of Sema3F produces a species that potently inhibits the binding of VEGF to neuropilin. These studies provide a mechanistic basis for understanding the anti-angiogenic activity of semaphorin as well as the physical interaction and competition between neuropilin ligands.