Heparanase is an endo-beta-D-glucuronidase involved in cleavage of heparan sulfate residues and hence participates in extracellular matrix degradation and remodeling. The heparanase cDNA encodes for a polypeptide of 543 amino acids that appears as a approximately 65 kDa band in SDS-PAGE analysis. The protein undergoes a proteolytic cleavage that is likely to occur at two potential cleavage sites, Glu(109)-Ser(110) and Gln(157)-Lys(158), yielding an 8 kDa polypeptide at the N-terminus, a 50 kDa polypeptide at the C-terminus, and a 6 kDa linker polypeptide that resides in-between. The active form of heparanase has long been thought to be a 50 kDa polypeptide isolated from cells and tissues. However, attempts to obtain heparanase activity after expression of the 50 kDa polypeptide failed, suggesting that the N-terminal region is important for heparanase enzymatic activity. It has been hypothesized that heterodimer formation between the 8 and 50 kDa heparanase subunits is important for heparanase enzymatic activity. By individually or co-expressing the 8 and 50 kDa heparanase subunits in mammalian cells, we demonstrate specific association between the heparanase subunits by means of co-immunoprecipitation and pull-down experiments. Moreover, a region in the 50 kDa heparanase subunit that mediates interaction with the 8 kDa subunit was identified. Altogether, our results clearly indicate that heterodimer formation is necessary and sufficient for heparanase enzymatic activity in mammalian cells.