In overt diabetic nephropathy (DNP), an increase in the permeability of the glomerular basement membrane (GBM) has been associated with a loss of negatively charged heparan sulfates (HS) in the GBM. Heparanase (HPSE), an endo-beta(1-4)-D-glucuronidase, can cleave HS and could be a potential candidate for the degradation of glomerular HS, leading to the development of proteinuria. We analyzed whether changes in HS expression are associated with HPSE expression in overt DNP. Immunofluorescence staining was performed to analyze HS, HPSE, and agrin core protein expression in kidney biopsies from patients with overt DNP and from rats and mice with streptozotocin (STZ)-induced diabetes. We also investigated the effect of transgenic HPSE overexpression in mice on glomerular HS and agrin expression. We demonstrate that the loss of GBM HS (-50%) and tubular HS (-60%) is associated with a four-fold increased HPSE expression in overt DNP. In addition, glomerular HPSE expression is upregulated in rats (messenger RNA (mRNA) 2.5-fold, protein three-fold) and mice (mRNA seven-fold, protein 1.5-fold) with STZ-induced diabetes. Furthermore, transgenic HPSE overexpression results in disappearance of HS, whereas expression of the core protein agrin remains unaltered. Our observations suggest that HPSE is involved in the pathogenesis of proteinuria in overt DNP by degradation of HS.