Heparanase is an endo-β-d-glucuronidase capable of cleaving heparan sulfate side chains at a limited number of sites, yielding heparan sulfate fragments of still appreciable size. Importantly, heparanase activity correlates with the metastatic potential of tumor-derived cells, attributed to enhanced cell dissemination as a consequence of heparan sulfate cleavage and remodeling of the extracellular matrix and basement membrane underlying epithelial and endothelial cells. Similarly, heparanase activity is implicated in neovascularization, inflammation and autoimmunity, involving the migration of vascular endothelial cells and activated cells of the immune system. The cloning of a single human heparanase cDNA 10 years ago enabled researchers to critically approve the notion that heparan sulfate cleavage by heparanase is required for structural remodeling of the extracellular matrix, thereby facilitating cell invasion. Progress in the field has expanded the scope of heparanase function and its significance in tumor progression and other pathologies. Notably, although heparanase inhibitors attenuated tumor progression and metastasis in several experimental systems, other studies revealed that heparanase also functions in an enzymatic activity-independent manner. Thus, inactive heparanase was noted to facilitate adhesion and migration of primary endothelial cells and to promote phosphorylation of signaling molecules such as Akt and Src, facilitating gene transcription (i.e. vascular endothelial growth factor) and phosphorylation of selected Src substrates (i.e. endothelial growth factor receptor). The concept of enzymatic activity-independent function of heparanase gained substantial support by the recent identification of the heparanase C-terminus domain as the molecular determinant behind its signaling capacity. Identification and characterization of a human heparanase splice variant (T5) devoid of enzymatic activity and endowed with protumorigenic characteristics, elucidation of cross-talk between heparanase and other extracellular matrix-degrading enzymes, and identification of single nucleotide polymorphism associated with heparanase expression and increased risk of graft versus host disease add other layers of complexity to heparanase function in health and disease. © 2010 FEBS.