Syndecan-1 (sdc-1) is a cell surface proteoglycan that mediates the interaction of cells with their matrix, influencing attachment, migration, and response to growth factors. In keratinocytes, loss of sdc-1 delays wound healing, reduces migration, and increases Transforming growth factor beta (TGFbeta) 1 expression. In this study we show that sdc-1 expression is significantly reduced in basal cell, squamous cell, and metastatic human skin cancers compared to normal human skin. In experimental mouse skin tumor induction, compared to wildtype (wt) BALB/c mice, papilloma formation in sdc-1 null mice was reduced by 50% and the percent of papillomas converting to squamous cell carcinoma (SCC) was enhanced. sdc-1 expression on wt mouse papillomas decreased as they converted to SCC. Furthermore, papillomas forming on sdc-1 null mice expressed suprabasal alpha3 and beta4 integrins; suprabasal beta4 integrin is a marker of a high risk for progression. While the proliferative response to phorbol-12-myristate-13-acetate (TPA) did not differ among the genotypes, sdc-1 null mice had an enhanced inflammatory response and retained higher levels of total TGFbeta1 within their skin after TPA treatment. sdc-1 null keratinocytes, transduced in vitro by oncogenic ras(Ha), expressed higher levels of beta4 integrin and had enhanced pSmad2 signaling and reduced senescence when compared to wt ras(Ha)-transduced keratinocytes. When ras(Ha)-transduced cells of both genotypes were grafted onto nude mice, null tumors converted to SCC with higher frequency confirming the skin painting experiments. These data indicate that sdc-1 is important both early in the development of skin tumors and in progression of skin cancers suggesting that reduced expression of sdc-1 could be a useful marker for progression in neoplastic skin lesions.