ARH-77 cells do not adhere to type I collagen and readily invade into collagen gels, but following expression of the transmembrane heparan sulfate proteoglycan syndecan-1, they bind collagen and fail to invade. We now show that cells transfected with syndecan-2 or syndecan-4 also bind collagen and are non-invasive. In contrast, cells transfected with the glycosylphosphatidylinositol-anchored proteoglycan glypican-1 do not bind to collagen and remain invasive, even though glypican- and syndecan-expressing cells have similar surface levels of heparan sulfate, and their proteoglycans have similar affinities for collagen. Analysis of cells expressing syndecan- 1-glypican-1 chimeric proteoglycans reveals that inhibition of invasion requires the extracellular domain of syndecan but not its transmembrane or cytoplasmic domain. Surprisingly, cells bearing a chimera composed of the glypican extracellular domain fused to the syndecan transmembrane and cytoplasmic domains bind to collagen but remain invasive, implying that adhesion to collagen is not by itself sufficient to inhibit invasion. Apparently, the extracellular domain of syndecan-1, presumably by interacting with cell-surface signal transducing molecules, directly regulates complex cell behaviors such as motility and invasiveness. These results also show for the first time that syndecans and glypicans can have distinct functions, even when expressed by the same cell type.