Heparanase is an enzyme that cleaves heparan sulfate chains of proteoglycans, and its expression has been associated with increased growth, metastasis, and angiogenesis of some tumors. Because myeloma tumor cells express high levels of the syndecan-1 heparan sulfate proteoglycan and because these tumors grow as highly vascularized aggregates within the bone marrow, we analyzed the activity, expression, and function of heparanase in myeloma patients. Analysis of heparanase activity in the plasma isolated from bone marrow biopsies of 100 patients reveals 86 positive for heparanase activity and 14 negative. The bone marrow samples can be further divided into three categories of heparanase activity, high activity (42 patients), low activity (44 patients), and negative (14 patients). In contrast to the bone marrow plasma, levels of heparanase activity in peripheral blood plasma of 29 myeloma patients were either negative or low, suggesting that in multiple myeloma, heparanase functions in the local microenvironment of the bone marrow and its activity is not significantly elevated systemically. Immunohistochemistry reveals that patients with high levels of heparanase activity often have tumor cells with intense staining for the enzyme. Interestingly, a marked heterogeneity among tumor cells was noted, with clusters of heavily stained cells surrounded by cells with weak or negative staining for heparanase. Analysis of microvessel density reveals a strikingly higher concentration of vessels in patients with high heparanase activity (78.96 vessels/mm 2) as compared with patients negative for heparanase activity (25.03 vessels/mm2). When human myeloma cells transfected with the cDNA for heparanase are implanted in severe combined immunodeficient (SCID) mice, the resulting tumors exhibited a significantly higher microvessel density than did tumors established with control cells. Thus, expression of heparanase appears to play a direct role in enhancing microvessel density in these myeloma tumors. Because heparanase is known to stimulate angiogenesis, and because high microvessel density is associated with poor prognosis in myeloma, we conclude that heparanase expression likely plays an important role in regulating the growth and progression of myeloma, and that therapies designed to block heparanase activity may aid in controlling this cancer.