Syndecan-1 (Sdc1) is an important member of the cell surface heparan sulfate proteoglycan family, highly expressed by epithelial cells in adult organisms. Sdc1 is involved in the regulation of cell migration, cell-cell and cell-matrix interactions, growth-factor, chemokine and integrin activity, and implicated in inflammatory responses and tumorigenesis. Gastrointestinal tract represents an important anatomic site where loss of Sdc1 expression was reported both in inflammation and malignancy. However, the biological significance of Sdc1 in chronic colitis-associated tumorigenesis has not been elucidated. To the best of our knowledge, this study is the first to test the effects of Sdc1 loss on colorectal tumor development in inflammation-driven colon tumorigenesis. Utilizing a mouse model of colitis-related colon carcinoma induced by the carcinogen azoxymethane (AOM), followed by the inflammatory agent dextran sodium sulfate (DSS), we found that Sdc1 deficiency results in increased susceptibility to colitis-associated tumorigenesis. Importantly, colitis-associated tumors developed in Sdc1-defficient mice were characterized by increased local production of IL-6, activation of STAT3, as well as induction of several STAT3 target genes that act as important effectors of colonic tumorigenesis. Altogether, our results highlight a previously unknown effect of Sdc1 loss in progression of inflammation-associated cancer and suggest that decreased levels of Sdc1 may serve as an indicator of colon carcinoma progression in the setting of chronic inflammation.