Heparan sulfate proteoglycans are integral components of the extracellular matrix that surrounds all mammalian cells. In addition to providing structural integrity, they act as a storage depot for a variety of heparan sulfate (HS)-binding proteins, including growth factors and chemokines. Heparanase is a matrix-degrading enzyme that cleaves heparan sulfate side chains from the core proteoglycans, thus liberating such HS-binding proteins, as well as potentially contributing to extracellular matrix degradation. Here, we report that heparanase mRNA and protein expression are increased in the neoplastic stages progressively unfolding in a mouse model of multistage pancreatic islet carcinogenesis. Notably, heparanase is delivered to the neoplastic lesions in large part by infiltrating Gr1+/Mac1+ innate immune cells. A sulfated oligosaccharide mimetic of heparan sulfate, PI-88, was used to inhibit simultaneously both heparanase activity and HS effector functions. PI-88 had significant effects at distinct stages of tumorigenesis, producing a reduction in the number of early progenitor lesions and an impairment of tumor growth at later stages. These responses were associated with decreased cell proliferation, increased apoptosis, impaired angiogenesis, and a substantive reduction in the number of invasive carcinomas. In addition, we show that the reduction in tumor angiogenesis is correlated with a reduced association of VEGF-A with its receptor VEGF-R2 on the tumor endothelium, implicating heparanase in the mobilization of matrix-associated VEGF. These data encourage clinical applications of inhibitors such as PI-88 for the many human cancers where heparanase expression is elevated or mobilization of HS-binding regulatory factors is implicated.