Heparan sulfate proteoglycans interact with many extracellular matrix constituents, growth factors and enzymes. Degradation of heparan sulfate by endoglycosidic heparanase cleavage affects a variety of biological processes. We have purified a 50-kDa heparanase from human hepatoma and placenta, and now report cloning of the cDNA and gene encoding this enzyme. Expression of the cloned cDNA in insect and mammalian cells yielded 65-kDa and 50-kDa recombinant heparanase proteins. The 50-kDa enzyme represents an N-terminally processed enzyme, at least 100-fold more active than the 65-kDa form. The heparanase mRNA and protein are preferentially expressed in metastatic cell lines and specimens of human breast, colon and liver carcinomas. Low metastatic murine T-lymphoma and melanoma cells transfected with the heparanase cDNA acquired a highly metastatic phenotype in vivo, reflected by a massive liver and lung colonization. This represents the first cloned mammalian heparanase, to our knowledge, and provides direct evidence for its role in tumor metastasis. Cloning of the heparanase gene enables the development of specific molecular probes for early detection and treatment of cancer metastasis and autoimmune disorders.