Extracellular matrix (ECM) deposition and organization is maintained by transmembrane signaling and integrins play major roles. We now show that a second transmembrane component, syndecan-2 heparan sulfate proteoglycan, is pivotal in matrix assembly. Chinese Hamster Ovary (CHO) cells were stably transfected with full length (S2) or truncated syndecan-2 lacking the C-terminal 14 amino acids of the cytoplasmic domain (S2deltaS). No differences in the amount of matrix assembly were noted with S2 cells, but those expressing S2deltaS could not assemble laminin or fibronectin into a fibrillar matrix. The loss of matrix formation was not caused by a failure to synthesize or externalize ECM components as determined by metabolic labeling or due to differences in surface expression of alpha5 or beta1 integrin. The matrix assembly defect was at the cell surface, since S2deltaS cells also lost the ability to rearrange laminin or fibronectin substrates into fibrils and to bind exogenous fibronectin. Transfection of activated alphaIIbalphaLdeltabeta3 integrin into alpha(5)-deficient CHO B2 cells resulted in reestablishment of the previously lost fibronectin matrix. However, cotransfection of this cell line with S2deltaS could override the presence of activated integrins. These results suggest a regulatory role for syndecan-2 in matrix assembly, along with previously suggested roles for activated integrins.