The antigen-mediated induction of heparanase, an endoglycosidase capable of degrading heparan sulfate from the subendothelial extracellular matrix (ECM), was investigated in a rat T lymphocyte cell line reactive against the basic protein (BP) of myelin. We found that nonactivated T lymphocytes could be induced to express heparanase activity following exposure to soluble but not to ECM-bound BP. The induction of heparanase was immunologically specific and independent of the presence of syngeneic or allogeneic antigen presenting cells (APC). However, anti-IA antibodies inhibited heparanase expression. Soluble BP induced secretion of heparanase into the culture medium within minutes, despite inhibition of protein synthesis. Cell lysates of T lymphocytes contained heparanase activity. Thus, T lymphocytes secrete a preformed heparanase following exposure to specific antigen.