Heparanase is a beta-D-endoglucuronidase that cleaves heparan sulfate (HS) and has been implicated in many important physiological and pathological processes, including tumor cell metastasis, angiogenesis, and leukocyte migration. We report herein the identification of active-site residues of human heparanase. Using PSI-BLAST and PHI-BLAST searches of sequence databases, similarities were identified between heparanase and members of several of the glycosyl hydrolase families (10, 39, and 51) from glycosyl hydrolase clan A (GH-A), including strong local identities to regions containing the critical active-site catalytic proton donor and nucleophile residues that are conserved in this clan of enzymes. Furthermore, secondary structure predictions suggested that heparanase is likely to contain an (alpha/beta)(8) TIM-barrel fold, which is common to the GH-A families. On the basis of sequence alignments with a number of glycosyl hydrolases from GH-A, Glu(225) and Glu(343) of human heparanase were identified as the likely proton donor and nucleophile residues, respectively. The substitution of these residues with alanine and the subsequent expression of the mutant heparanases in COS-7 cells demonstrated that the HS-degrading capacity of both was abolished. In contrast, the alanine substitution of two other glutamic acid residues (Glu(378) and Glu(396)), both predicted to be outside the active site, did not affect heparanase activity. These data suggest that heparanase is a member of the clan A glycosyl hydrolases and has a common catalytic mechanism that involves two conserved acidic residues, a putative proton donor at Glu(225) and a nucleophile at Glu(343).