The remodeling of extracellular matrix (ECM) is an important process required for cancer cells to turn into invasive and metastatic cancer cells. To dissolve the protein components of ECM, matrix metalloproteinases are some of the essential enzymes. Another ECM remodeling enzyme is the heparanase (Hpa) that digests the heparin sulfate component of the matrix. In metastatic cancer cells the Hpa gene is upregulated. To investigate the mechanism of why Hpa was upregulated in metastatic cancer cells, the regulatory sequence of heparanase gene was isolated and its function analysed in metastatic breast cancer cells. We found there are four ETS transcription factor binding sites. Two of them flanking the transcription initiation of the Hpa gene are nonfunctional, whereas two others are highly functional and responded to exogenously added ETS transcription factors. Mutation of these two ETS binding sites abolished the transcriptional activation of Hpa promoter by ETS transcription factors. Among four transcription factors tested (ETS1, ETS2, PEA3, and ER81), ETS1 and ETS2 are more potent in transactivating the human Hpa gene. Furthermore, dominant-negative ETS transcription factors failed to transactivate Hpa promoter and could abrogate the function of wild-type transcription factor in transactivation activity of ETS transcription factors on the Hpa promoter. These results suggest that ETS transcription factors play an important role in tumor invasion and metastasis by modulating the remodeling of ECM.