Syndecans are integral membrane proteoglycans characterized by the similarity of cytoplasmic and transmembrane domains of the core proteins. Syndecans may regulate cell behavior by participating in matrix recognition and growth factor binding. Using syndecan-1 deletion mutants, we show that the extracellular part of the molecule (ectodomain) can suppress malignant growth, stimulate actin polymerization, and induce epithelioid morphology in mouse mammary tumor Shionogi 115 (S115) cells. Free ectodomain isolated from the culture medium of either syndecan-1-transfected S115 cells or normal murine mammary gland (NMuMG) cells can suppress the growth of S115 tumor cells at nanomolar concentrations. The ectodomain of syndecan-1 inhibited also the growth of other carcinoma cell lines, such as CarB and MCF-7, but not such inhibition was observed for contact-inhibited cell lines, including NIH 3T3 cells, NMuMG cells, and human HaCaT keratinocytes. Intact heparan sulfate structure of the ectodomain was required for the suppression because degradation of heparan sulfate chains completely abolished growth inhibition. These results suggest a tumor suppressor activity for the syndecan-1 ectodomain.