Heparanase is an endo-beta-glucuronidase responsible for the cleavage of heparan sulfate, participating in extracellular matrix degradation and remodeling. Traditionally, heparanase activity was well correlated with the metastatic potential of a large number of tumor-derived cell types. More recently, heparanase up-regulation was detected in essentially all human tumors examined, correlating, in some cases, with poor postoperative survival and increased tumor vascularity. The role of heparanase in primary tumor progression is, however, poorly understood. Here, we overexpressed the human heparanase gene in a human glioma cell line, U87. We found that heparanase overexpression induces cell invasion, as might be expected. Surprisingly, elevated heparanase expression levels correlated with decreased proliferation rates and increased cell spreading and formation of a tight monolayer rather than large cell aggregates. This phenotypic appearance was accompanied by beta1-integrin activation, FAK and Akt phosphorylation, and Rac activation. In a xenograft tumor model, relatively moderate heparanase expression levels significantly enhanced tumor development and tumor vascularity, whereas high heparanase expression levels inhibited tumor growth. These results indicate that heparanase activates signal transduction pathways and, depending on its expression levels, may modulate tumor progression.