Mammalian heparanase (endo-beta-glucuronidase) degrades heparan sulfate proteoglycans and is an important modulator of the extracellular matrix and associated factors. The enzyme is preferentially expressed in neoplastic tissues and contributes to tumour metastasis and angiogenesis. To investigate the epigenetic regulation of the heparanase locus, methylation-specific and bisulfite PCR were performed on a panel of 22 human cancer cell lines. Cytosine methylation of the heparanase promoter was associated with inactivation of the affected allele. Despite lack of sequence homology, extensively methylated CpG islands were found both in human choriocarcinoma (JAR) and rat glioma (C-6) cells which lack heparanase activity. Treatment of these cells with demethylating agents (5-azacytidine, 5-aza-2'-deoxycytidine) resulted in stable dose- and time-dependant promoter hypomethylation accompanied by reappearance of heparanase mRNA, protein and enzymatic activity. An inhibitor of histone deacetylase, Trichostatin A, failed to induce either of these effects. Upregulation of heparanase expression and activity by demethylating drugs was associated with a marked increase in lung colonization by pretreated C-6 rat glioma cells. The increased metastatic potential in vivo was inhibited in mice treated with laminaran sulfate, a potent inhibitor of heparanase activity. We propose a model wherein expression of mammalian heparanase gene is modulated by the interplay between trans-activating genetic and cis-inhibitory epigenetic elements in its promoter.