Because syndecans are present at sites of cell-cell contact in vivo it has been hypothesized that they play a role in mediating cell-cell adhesion. However, there has been no direct evidence to support this notion. To address this question, B lymphoid (ARH-77) cells were transfected with the cDNA for murine syndecan-1. Unlike the parental cells, the transfectants form large multicellular aggregates in suspension cultures and stain intensely for syndecan-1 at sites of cell-cell contact. Using rotation-mediated aggregation assays, we find that aggregation of syndecan-1-transfected cells is dependent on divalent cations and is inhibited by the following: (i) addition of heparin and heparin-like glycosaminoglycans, (ii) removal of heparan sulfate from the cell surface, or (iii) addition of exogenous purified syndecan-1. Mixing of syndecan-1-transfected and control-transfected cells results in aggregates containing both cell types indicating that aggregation occurs through a heterophilic adhesion mechanism in which heparan sulfate chains bind to a counter-receptor present on these cells. Importantly, syndecan-4-transfected cells also aggregate in a heparan sulfate-dependent manner, while in contrast, betaglycan-transfected cells aggregate poorly. Thus, syndecans may be important mediators of cell-cell adhesion, but this function may not be common to all transmembrane heparan sulfate-bearing proteoglycans.