Because syndecan-4 (SD-4) on effector and memory T cells inhibits T-cell activation by binding dendritic cell-associated heparan sulfate proteoglycan-integrin ligand (DC-HIL) on antigen presenting cells and because malignant cells of the cutaneous T-cell lymphoma (CTCL) subset, Sézary syndrome (SS), exhibit memory T-cell phenotype, we posited SS cells to express SD-4. Indeed, malignant T cells from patients with SS and from CTCL cell lines constitutively expressed SD-4 at high levels, in contrast to T cells from healthy volunteers and patients with other inflammatory skin diseases and to non-CTCL cell lines that did not. SS cells also bound to DC-HIL at a level higher than normal T cells activated in vitro, resulting in their inhibited proliferation to anti-CD3 antibody. SD-4 on SS cells also trapped transforming growth factor-β1 to their cell surface, enhancing their ability to inhibit activation of syngeneic and allogeneic normal T cells. All of these inhibitory properties were dependent on overexpression of distinct heparan sulfate (HS) moieties by SD-4 on SS cells. Finally, we showed toxin-conjugated DC-HIL to abrogate the ability of SS cells to proliferate in vitro. These findings indicate that SD-4 bearing distinct HS moieties plays a pathogenic role in SS and may be targeted for treatment.