Expression of the transmembrane proteoglycan syndecan-1 in Schwann cells leads to enhanced spreading and cytoskeletal reorganization, but without an apparent stable association of syndecan-1 with cytoskeletal structures such as focal adhesions. Since cell surface oligomerization may be a mechanism for regulating the activities of transmembrane receptors, we wanted to investigate whether antibody-induced aggregation of the proteoglycan would promote its association with the cytoskeleton. When syndecan-1-expressing cells were incubated with anti-syndecan-1 and anti-IgG antibodies, clustering of proteoglycan on the cell surface was observed by immunofluorescence microscopy. The resulting pattern of syndecan-1 distribution was very similar to that of the underlying microfilament network, as visualized by fluorescent-phalloidin staining. In cells that were fixed briefly with paraformaldehyde before addition of the anti-IgG antibodies no such colocalization of syndecan-1 and microfilaments was observed. Additional findings supported the conclusion that this pattern of syndecan-1 distribution reflected an association with microfilaments: aggregated syndecan-1 was resistant to extraction by nonionic detergent; incubation of the cells with cytochalasin b, but not colchicine, altered the pattern of aggregated syndecan-1 distribution; antibody-induced clustering of syndecan-1 led to a reorganization of actin filaments. Syndecan-1 remained on the cell surface following antibody-induced clustering, as revealed by immunogold staining and transmission electron microscopy. A mutant form of syndecan-1 lacking most of the cytoplasmic domain failed to exhibit actin filament association or induce actin reorganization following antibody-mediated aggregation. These results suggest that transient associations of syndecan family proteoglycans with microfilaments may be important aspects of their biological functions.