Vascular endothelial growth factor (VEGF)- driven increase in vascular permeability is a key feature of many disease states associated with inflammation and ischemic injury, contributing significantly to morbidity and mortality in these settings. Despite its importance, no specific regulators that preferentially control VEGF-dependent increase in permeability versus its other biological activities, have been identified. Here we report that a proteoglycan Syndecan-2 (Sdc2) regulates the interaction between a transmembrane phosphatase DEP1 and VEGFR2 by controlling cell surface levels of DEP1. In the absence of Sdc2 or the presence of an antibody that blocks Sdc2-DEP1 interaction, increased plasma membrane DEP1 levels promote selective dephosphorylation of the VEGFR2 Y951 site that is involved in permeability control. Either an endothelial-specific Sdc2 deletion or a treatment with an anti-Sdc2 antibody result in a highly significant reduction in stroke size due to a decrease in intracerebral edema.