Expression of heparan sulfate-degrading endoglycosidases, commonly referred to as heparanases, correlates with the metastatic potential of tumor cell lines, and treatment with heparanase inhibitors markedly reduces the incidence of metastasis in experimental animals. We purified a 50 kDa heparanase from human hepatoma and placenta and cloned a cDNA and gene encoding a protein of 543 amino acids. Only one heparanase sequence was identified, suggesting that this enzyme is the dominant endoglucuronidase in mammalian tissues. Expression of the cloned cDNA in insect and mammalian cells yielded 65 kDa and 50 kDa recombinant proteins. The 50 kDa enzyme represents an N-terminal processed enzyme that is at least 200-fold more active than the full-length 65 kDa form. Processing was demonstrated following incubation of the full-length recombinant enzyme with intact tumor cells. The heparanase mRNA and protein are preferentially expressed in metastatic cell lines and in specimens of human melanomas and carcinomas. In the colon, both the heparanase mRNA and protein are expressed already at the stage of tubulovillous adenoma, but not in the adjacent 'normal-looking' colon epithelium. Non-metastatic murine T lymphoma and melanoma cells transfected with the heparanase gene acquired a highly metastatic phenotype in vivo. Apart from its involvement in the egress of cells from the vasculature, heparanase is tightly involved in angiogenesis, both directly--by promoting invasion of endothelial cells (vascular sprouting), and indirectly--by releasing heparan sulfate-bound basic fibroblast growth factor, and generating HS degradation fragments that promote bFGF activity. The angiogenic potential of heparanase was demonstrated in vivo (Matrigel plug assay) by showing a three to fourfold increase in neovascularization induced by Eb T lymphoma cells following their transfection with the heparanase gene. The ability of heparanase to promote both tumor angiogenesis and metastasis makes it a promising target for cancer therapy.