Although widespread skeletal dissemination is a critical step in the progression of myeloma, little is known regarding mechanisms that control this process. High levels of the syndecan-1 heparan sulfate proteoglycan are present in the myeloma microenvironment where they bind numerous growth factors (e.g., HGF, FGF-2) that control myeloma growth, angiogenesis and dissemination. Heparanase-1 (HPSE1) is an enzyme that cleaves heparan sulfate chains of proteoglycans and thus may regulate heparan-binding growth factor activity. We have previously demonstrated that human myeloma cells express heparanase and that active enzyme is present in the plasma harvested from the marrow of myeloma patients (Cancer Res. 63: 8749–56). In the present study, experiments were performed to determine the effects of enhanced expression of heparanase on myeloma tumor growth and dissemination in vivo. The human myeloma cell line, CAG, was transfected with human HPSE1 cDNA (CAGHPSE1) or with corresponding vector only (CAGNeo). The transfected cells were injected either directly into the tibia or subcutaneously into the flank of severe combined immune deficient (SCID) mice and tumor growth rate, microvessel density and metastasis to bone were analyzed. We discovered that expression of heparanase: (i) accelerates the initial growth of the primary tumor, (ii) increases whole body tumor burden as compared to controls, and (iii) enhances both the number and size of microvessels within the primary tumor. In addition, enhanced expression of heparanase dramatically upregulates spontaneous metastasis of subcutaneously-injected myeloma cells to bone (95% in mice bearing CAGHPSE1 tumors, n = 21; as compared to 6% in mice bearing CAGNeo tumors, n=16). When tumor was injected directly into the tibia, 100% of the mice bearing CAGHPSE1 tumor cells had metastases within the contralateral femur (n=10) while only 29% of the mice bearing CAGNeo tumor had metastases (n=7). These studies describe a novel experimental animal model for examining the spontaneous metastasis of bone-homing tumors and indicate that heparanase is a critical determinant of myeloma dissemination and growth in vivo. Thus, therapeutic modulation of heparanase expression or function may be of value in the treatment of myeloma and other cancers that metastasize to bone.