Recombinant human keratinocyte growth factor 2 (rhKGF-2) is a member of fibroblast growth factor protein family currently being investigated for its promising significant effects in treating epithelial damage. Molecular modification with polyethylene glycol (PEGylation) is an effective approach to improve protein biostability and decrease protein immunogenic activity. In this study, we modified rhKGF-2 through PEGylation at N-terminal residue using 20 kDa PEG-phenyl-isothiocyanate (PIT-PEG20K). PEGylated rhKGF-2 is then purified to near homogeneity by Sephadex G-25 gel filtration followed by a Heparin Sepharose TM CL-6B affinity chromatography. This PEGylated rhKGF-2 retained about 60% of mitogenic activity compared to the non-modified rhKGF-2. Its relative thermal stability at normal physiological temperature and structural stability were significantly enhanced. Moreover, the immunogenicity of PEGylated rhKGF-2 in mice is significant decreased compared to non-modified rhKGF-2. These results suggest that PEGylation of rhKGF-2 could be a more effective approach to the pharmacological and therapeutic application of rhKGF-2.