Syndecan-1, a transmembrane heparan sulphate proteoglycan (HSPG), functions as a matrix receptor on the basal surface of epithelial cells. It also co-localizes with E-cadherin at the lateral cell surface where its function is uncertain. Tumour development in the large bowel is associated with loss of normal epithelial adhesion and altered patterns of expression of cell adhesion molecules, possibly including syndecan-1. To evaluate changes in syndecan-1 expression during the development of colorectal neoplasia, 59 adenomas and 20 carcinomas arising from adenomas were investigated by immunohistochemistry. The staining intensity and distribution of syndecan-1 and E-cadherin in sequential sections was examined, semi-quantified and compared. Staining of syndecan-1 and E-cadherin was uniform in normal colorectal epithelial cells, and located at the basolateral surface. No significant change was seen in either molecule in mildly or moderately dysplastic adenomas. A significant reduction in expression of both syndecan-1 and E-cadherin was seen in severely dysplastic epithelium as compared to moderate dysplasia (P = 0.001 and P = 0.004 respectively). Similarly, there was a significant reduction of both molecules in carcinomas compared with associated adenomas (syndecan-1 P = 0.00003; E-cadherin P = 0.002). In both cases the loss of syndecan-1 expression was more striking than that of E-cadherin. Previous in vitro studies have shown that epithelial cells made deficient in syndecan-1 cease to express E-cadherin, suggesting a causal association. Our results support these findings and indicate that disruption of cell-matrix adhesion is critical in colorectal carcinogenesis, probably preceding changes in the purely homotypic cell-cell adhesion mediated by E-cadherin.