Syndecan is a cell surface heparan sulfate-rich proteoglycan found on various epithelial cells but also in some embryonic mesenchymal tissues. We have immunoisolated syndecan from embryonic tooth mesenchyme that appeared as a 250-300-kDa molecule (Kav = 0.3 in Sepharose 4B), containing only heparan sulfate side chains (Mr = 35,000). Northern analysis of whole tooth germs and tooth mesenchymes also revealed high expression of syndecan mRNAs (2.6 and 3.4 kilobases). In the binding assay utilizing nitrocellulose as a solid phase to immobilize matrix molecules, syndecan immunoisolated from tooth mesenchyme revealed binding to tenascin, and this interaction was shown to be mediated via heparan sulfate side chains. In contrast, syndecan from mouse mammary epithelial cells showed only weak interaction with tenascin. We propose that syndecan and tenascin may represent interactions of a cell surface receptor and a matrix ligand involved in mesenchymal cell condensation and differentiation during early organogenesis.