Heparan sulfate proteoglycans (HSPGs) function as a co-receptor for heparin-binding growth factors, such as fibroblast growth factors (FGFs) and heparin-bound epidermal growth factor (HB-EGF). The HS side chain of HSPGs can be cleaved by HPR1 (heparanase-1), an endoglycosidase that is overexpressed in many types of malignancies. In the present study, we demonstrated that HPR1 expression in pancreatic adenocarcinomas inversely correlated with the presence of heparan sulfate (HS) in the basement membrane. In vitro cell culture study revealed that cell surface HS levels inversely correlated with HPR1 activity in five pancreatic cancer cell lysates and their conditioned media. Heparin and PI-88, two HPR1 inhibitors, were able to increase cell surface HS levels in PANC-1 cells in a dose-dependent manner. The ability of HPR1 to degrade cell surface HS was confirmed by showing that cell surface HS levels were increased in HT1080 cells stably transfected with the HPR1 antisense gene but was decreased in the cells overexpressing HPR1. Further studies showed that PI-88 and heparin were able to stimulate PANC-1 cell proliferation in the absence or presence of exogenous FGF2, whereas exogenous HPR1 was able to inhibit PANC-1 cell proliferation in a dose-dependent manner. Modulation of PANC-1 cell proliferation by HPR1 or HPR1 inhibitors corresponded with the inhibition or activation of the mitogen-activated protein kinase. Our results suggest that HPR1 expressed in pancreatic adenocarcinomas can suppress the proliferation of pancreatic tumor cells in response to the growth factors that require HSPGs as their co-receptors.