In pathologies such as cancer, aberrant Transforming Growth Factor-β (TGF-β) signaling exerts profound tumor intrinsic and extrinsic consequences. Intense clinical endeavors are underway to target this pivotal pathway. Central to the success of these interventions is pinpointing factors that decisively modulate the TGF-β responses. Betaglycan/type III TGF-β receptor (TβRIII), is an established co-receptor for the TGF-β superfamily known to bind directly to TGF-βs 1-3 and inhibin A/B. While betaglycan can be membrane-bound, it can also undergo ectodomain cleavage to produce soluble-betaglycan that can sequester its ligands. The extracellular domain of betaglycan undergoes heparan sulfate and chondroitin sulfate glycosaminoglycan modifications, transforming betaglycan into a proteoglycan. Here we report the unexpected discovery that the heparan sulfate modifications are critical for the ectodomain shedding of betaglycan. In the absence of such modifications, betaglycan is not shed. Such shedding is indispensable for the ability of betaglycan to suppress TGF-β signaling and the cells' responses to exogenous TGF-β ligands. Using unbiased transcriptomics, we identified TIMP3 as a key regulator of betaglycan shedding and thereby TGF-β signaling. Our results bear significant clinical relevance as modified betaglycan is present in the ascites of patients with ovarian cancer and can serve as a marker for predicting patient outcomes and TGF-β signaling responses. These studies are the first to demonstrate a unique reliance on the glycosaminoglycan modifications of betaglycan for shedding and influence on TGF-β signaling responses. Dysregulated shedding of TGF-β receptors plays a vital role in determining the response and availability of TGF-βs', which is crucial for prognostic predictions and understanding of TGF-β signaling dynamics.