Proteoglycans are macromolecules formed by a protein core to which sugar chains are covalently attached. They are present on the cell surface and in the ECM of living things. In normal liver syndecan-1 is the dominant transmembrane proteoglycan, trace amounts of ECM proteoglycans are in the stromal components. The amounts of proteoglycans we studied increase in liver cirrhosis. In liver cancer abnormal localization of syndecan-1 and stroma rich in agrin was characteristic. The core proteins as well as the sugar chains of proteoglycans interact with and modulate the effect of regulatory factors. This implies that structural alterations of proteoglycans contribute to the development of malignant phenotype. Heparan sulfate chains of liver cancer are undersulfated with decreased or altered biological activity. Their binding capacity for transcription factor decreases, and they do not inhibit topoisomerase I enzyme. Truncated form of syndecan-1 lacking the extracellular domain of the molecule induces differentiation of hepatoma cell line and inhibits the shedding of syndecan-1. This phenomenon calls attention to the importance of syndecan-1 shedding in the regulation of cell behavior.