Cellular behaviour during development is dictated, in part, by the insoluble extracellular matrix and the soluble growth factor peptides, the major molecules responsible for integrating cells into morphologically and functionally defined groups. These extracellular molecules influence cellular behaviour by binding at the cell surface to specific receptors that transduce intracellular signals in various ways not yet fully clear. Syndecan, a cell surface proteoglycan found predominantly on epithelia in mature tissues binds both extracellular matrix components (fibronectin, collagens I, III, V, and thrombospondin) and basic fibroblast growth factor (bFGF). Syndecan consists of chondroitin sulfate and heparan sulphate chains linked to a 31 kilodalton (kDa) integral membrane protein. Syndecan represents a family of integral membrane proteoglycans that differ in extracellular domains, but share cytoplasmic domains. Syndecan behaves as a matrix receptor: it binds selectively to components of the extracellular matrix, associates intracellularly with the actin cytoskeleton when cross-linked at the cell surface, its extracellular domain is shed upon cell rounding and it localizes solely to basolateral surfaces of simple epithelia. Mammary epithelial cells made syndecan-deficient become fibroblastic in morphology and cell behaviour, showing that syndecan maintains epithelial cell morphology. Syndecan changes in quantity, location and structure during development: it appears initially on four-cell embryos (prior to its known matrix ligands), becomes restricted in the pre-implementation embryo to the cells that will form the embryo proper, changes its expression due to epithelial-mesenchymal interactions (for example, induced in kidney mesenchyme by the ureteric bud), and with association of cells with extracellular matrix (for example, during B-cell differentiation), and ultimately, in mature tissues becomes restricted to epithelial tissues. The number and size of its glycosaminoglycan chains vary with changes in cell shape and organization yielding tissue type-specific polymorphic forms of syndecan. Its interactions with the major extracellular effector molecules that influence cell behaviour, its role in maintaining cell shape and its spatial and temporal changes in expression during development indicate that syndecan is involved in morphogenesis.