The present study emphasizes the importance of cell surface expression and secretion of heparanase (endo-beta-D-glucuronidase) in tumor angiogenesis and metastasis. For this purpose, nonmetastatic Eb mouse lymphoma cells were transfected with the predominantly intracellular human heparanase or with a readily secreted chimeric construct composed of the human enzyme and the chicken heparanase signal peptide. Eb cells overexpressing the secreted heparanase invaded a reconstituted basement membrane to a much higher extent than cells overexpressing the intracellular enzyme. Cell invasion was inhibited in the presence of laminaran sulfate, a potent inhibitor of heparanase activity and experimental metastasis. The increased invasiveness in vitro was reflected in vivo by rapid and massive liver colonization and accelerated mortality. In fact, mice inoculated with cells expressing the secreted enzyme succumb because of liver metastasis and dysfunction, as early as 10 days after s.c. inoculation of the cells, when their tumor burden did not exceed 1% of body weight. Cell surface localization and secretion of heparanase markedly stimulated tumor angiogenesis, as demonstrated by a 4-6-fold increase in vessel density and functionality evaluated by MRI of tumors produced by cells expressing the secreted vs. the nonsecreted heparanase, consistent with actual counting of blood vessels. Altogether, our results indicate that the potent proangoigenic and prometastatic properties of heparanase are tightly regulated by its cellular localization and secretion. The increased potency of the secreted enzyme makes it a promising target for anticancer drug development.