In previous studies, we have demonstrated that human heparanase (endo-beta-D-glucuronidase) is localized primarily in a perinuclear pattern within lysosomes and late endosomes, and occasionally may be surface associated and secreted. The presence of two potential nuclear localization sequences in human heparanase, led us to investigate heparanase translocation into the nucleus and subsequent degradation of nuclear heparan sulfate. Applying cell fractionation, Western blot analysis, determination of heparanase activity and confocal microscopy, we identified heparanase within the nuclei of human glioma and breast carcinoma cells and estimated its amount to be about 7% of the cytosolic enzyme. Our results indicate that nuclear heparanase colocalizes with nuclear heparan sulfate and is enzymaticaly active. Moreover, following uptake of latent 65 kDa heparanase by cells that do not express the enzyme, an active 50 kDa heparanase was detected in the cell nucleus, capable of degrading both nuclear and extracellular matrix-derived heparan sulfate. Immunohistochemical examination of human squamous cell carcinoma specimens revealed a prominent granular staining of heparanase within the nuclei of the epithelial tumor cells vs no nuclear staining in the adjacent stromal cells. Taken together, it appears that heparanase is translocated into the cell nucleus where it may degrade the nuclear heparan sulfate and thereby affect nuclear functions that are thought to be regulated by heparan sulfate. Nuclear localization of heparanase suggests that the enzyme may fulfill nontraditional functions (ie, regulation of gene expression and signal transduction) apart of its well-documented involvement in cancer metastasis, angiogenesis and inflammation.