The extracellular sulfatases (Sulfs) are an evolutionally conserved family of heparan sulfate (HS)-specific 6-O-endosulfatases. These enzymes remodel the 6-O-sulfation of cell surface HS chains to promote Wnt signaling and inhibit growth factor signaling for embryonic tissue patterning and control of tumor growth. In this study we demonstrate that the avian HS endosulfatases, QSulf1 and QSulf2, exhibit the same substrate specificity toward a subset of trisulfated disaccharides internal to HS chains. Further, we show that both QSulfs associate exclusively with cell membrane and are enzymatically active on the cell surface to desulfate both cell surface and cell matrix HS. Mutagenesis studies reveal that conserved amino acid regions in the hydrophilic domains of QSulf1 and QSulf2 have multiple functions, to anchor Sulf to the cell surface, bind to HS substrates, and to mediate HS 6-O-endosulfatase enzymatic activity. Results of our current studies establish the hydrophilic domain (HD) of Sulf enzymes as an essential multifunctional domain for their unique endosulfatase activities and also demonstrate the extracellular activity of Sulfs for desulfation of cell surface and cell matrix HS in the control of extracellular signaling for embryonic development and tumor progression.