Heparanase is an enzyme that cleaves heparan sulfate and through this activity promotes tumor growth, angiogenesis, invasion, and metastasis in several tumor types. In human breast cancer patients, heparanase expression is associated with sentinel lymph node metastases. However, the precise role of heparanase in the malignant progression of breast cancer is unknown. To examine this, a variant of MDA-MB-231 cells was transfected with the cDNA for human heparanase (HPSE cells) or with vector alone as a control (NEO cells). Transfection produced a 6-fold increase in heparanase activity in HPSE cells relative to NEO cells. When injected into the mammary fat pads of severe combined immunodeficient mice, the tumors formed by HPSE cells initially grow significantly faster than the tumors formed by NEO cells. The rapid growth is due in part to increased angiogenesis, as microvessel densities are substantially elevated in primary HPSE tumors compared with NEO tumors. Although metastases to bones are not detected, surprisingly vigorous bone resorption is stimulated in animals bearing tumors formed by the HPSE cells. These animals have high serum levels of the C-telopeptide derived from type I collagen as well as significant elevation of the active form of tartrate-resistant acid phosphatase (TRAP)-5b. In contrast, in animals having a high tumor burden of Neo cells, the serum levels of C-telopeptide and TRAP-5b never increase above the levels found before tumor injection. Consistent with these findings, histologic analysis for TRAP-expressing cells reveals extensive osteoclastogenesis in animals harboring HPSE tumors. In vitro osteoclastogenesis assays show that the osteoclastogenic activity of HPSE cell conditioned medium is significantly enhanced beyond that of NEO conditioned medium. This confirms that a soluble factor or factors that stimulate osteoclastogenesis are specifically produced when heparanase expression is elevated. These factors exert a distal effect resulting in resorption of bone and the accompanying enrichment of the bone microenvironment with growth-promoting factors that may nurture the growth of metastatic tumor cells. This novel role for heparanase as a promoter of osteolysis before tumor metastasis suggests that therapies designed to block heparanase function may disrupt the early progression of bone-homing tumors. ©2005 American Association for Cancer Research.