Chemokine CXCL12 (CXC chemokine ligand 12) signalling through CXCR (CXC chemokine receptor) 4 and CXCR7 has essential functions in development and underlies diseases including cancer, atherosclerosis and autoimmunity. Chemokines may form homodimers that regulate receptor binding and signalling, but previous studies with synthetic CXCL12 have produced conflicting evidence for homodimerization. We used bioluminescence imaging with GL (Gaussia luciferase) fusions to investigate dimerization of CXCL12 secreted from mammalian cells. Using column chromatography and GL complementation, we established that CXCL12 was secreted from mammalian cells as both monomers and dimers. Secreted CXCL12 also formed homodimers in the extracellular space. Monomeric CXCL12 preferentially activated CXCR4 signalling through Gαi and Akt, whereas dimeric CXCL12 more effectively promoted recruitment of β-arrestin 2 to CXCR4 and chemotaxis of CXCR4-expressing breast cancer cells. We also showed that CXCR7 preferentially sequestered monomeric CXCL12 from the extracellular space and had minimal effects on dimeric CXCL12 in cell-based assays and an orthotopic tumour xenograft model of human breast cancer. These studies establish that CXCL12 secreted from mammalian cells forms homodimers under physiological conditions. Since monomeric and dimeric CXCL12 have distinct effects on cell signalling and function, our results have important implications for ongoing efforts to target CXCL12 pathways for therapy.