Glypicans are heparan sulfate proteoglycans that are attached to the cell surface by a GPI (glycosylphosphatidylinositol)anchor. Glypicans regulate the activity of Wnts, Hedgehogs,bone morphogenetic proteins and fibroblast growth factors. In the particular case of Wnts, it has been proposed that GPI-anchored glypicans stimulate Wnt signalling by facilitating and/or stabilizing the interaction between Wnts and their cell surface receptors. On the other hand, when glypicans are secreted to the extracellular environment, they can act as competitive inhibitors of Wnt. Genetic screens in Drosophila have recently identified a novel inhibitor of Wnt signalling named Notum. The Wnt inhibiting activity of Notum was associated with its ability to release Dlp [Dally (Division abnormally delayed)-like protein; a Drosophila glypican] from the cell surface by cleaving the GPI anchor. Because these studies showed that the other Drosophila glypican Dally was not released from the cell surface by Notum,it remains unclear whether this enzyme is able to cleave glypicans from mammalian cells. Furthermore, it is also not known whether Notum cleaves GPI-anchored proteins that are not members of the glypican family. Here, we show that mammalian Notum can cleave several mammalian glypicans. Moreover, we demonstrate that Notum is able to release GPI-anchored proteins other than glypicans. Another important finding of the present study is that,unlike GPI-phospholipase D, the other mammalian enzyme that cleaves GPI-anchored proteins, Notum is active in the extracellular environment. Finally, by using a cellular system in which GPC3 (glypican-3) stimulates Wnt signalling, we show that Notum can act as a negative regulator of this growth factor.