The purpose of this study was to dramatically enhance the solubility (> 400 fold) and stability of a therapeutic protein (Fibroblast Growth Factor 20) and to perform detailed biophysical characterization for the optimization of its formulation. The solubility of FGF-20 strongly depends on pH, arginine concentration and anions present in a buffer system. In the absence and presence of arginine, solubility was higher at lower pH (5 < or = pH < or = 6) and then decreased steadily with a minimum solubility at around pH 6.3 and plateaus at around pH 7.5 respectively. For a given pH, the protein was most soluble in arginine-sulfate. The solubility of FGF-20 increases with an increase in arginine-sulfate concentration for a given pH. However, a salting out effect was observed at higher arginine-sulfate concentration. Polysorbate-80 did not have any striking effect on solubility and no effect on thermal stability, but it significantly prevented the loss of protein under agitated conditions. Thermal stability of FGF-20 measured by DSC was increased with an increase in arginine-sulfate concentration (at least up to 0.5M). A sturdy dependence of thermal stability on pH was observed with about a 15 degrees C increase in T(m) (melting temperature) at pH 7.0 in comparison to pH 5.0. From the DSC data, approximate stability curves were generated and cold denaturation temperatures were predicted. Denaturant induced unfolding studies provided better insight of FGF-20 in different solution conditions in terms of structure and stability than the DSC data. An inverse relationship of solubility and thermal stability was observed in the pH range of 5.0 to 8.5 at a fixed arginine concentration and is consistent with Linderstrom-Lange's smeared model. A direct correlation between solubility and thermal stability was observed at different arginine concentrations for a fixed pH. The effect of arginine on the solubility and stability of FGF-20 was dominated by the preferential binding interaction.