We have previously shown that the interaction of heparan sulfate (HS), a constituent of cell surfaces and extracellular matrices, with murine macrophages causes activation of the macrophages leading to the production of cytokines and PGE2 and profound changes in the cellular immune responses triggered by the macrophages. Here we describe the molecular mechanisms that underlie these immunoregulatory changes. We demonstrate that HS delivers signals to macrophages through at least two pathways, one involving the activation of a tyrosine kinase and of nuclear factor-KB, and the other involving the activation of protein kinase C and the elevation of intracellular calcium. The former pathway is associated with the production of IL-6, and the latter pathway is associated with the production of PGE2. Our findings suggest a model in which components of the microenvironment, such as HS, may determine the functional state of an APC, thereby modifying immune responses.