Syndecan-1 (CD138) is a transmembrane heparan sulfate-bearing proteoglycan expressed by most myeloma plasma cells that regulates adhesion, migration, and growth factor activity. In patients with myeloma, shed syndecan-1 accumulates in the bone marrow, and high levels of syndecan-1 in the serum are an indicator of poor prognosis. To test the effect of soluble syndecan-1 on tumor cell growth and dissemination, ARH-77 B-lymphoid cells were engineered to produce a soluble form of syndecan-1. Controls included vector only (neo)-transfected cells and cells transfected with full-length syndecan-1 complementary DNA that codes for the cell surface form of syndecan-1. Assays reveal that all 3 transfectants have similar growth rates in vitro, but cells expressing soluble syndecan-1 are hyperinvasive in collagen gels relative to controls. When injected into the marrow of human bones that were implanted in severe combined immunodeficient mice, tumors formed by cells expressing soluble syndecan-1 grow faster than tumors formed by neo-transfected cells or by cells expressing cell surface syndecan-1. In addition, cells bearing cell surface syndecan-1 exhibit a diminished capacity to establish tumors within the mice as compared with both neo- and soluble syndecan-1-transfected cells. Tumor cell dissemination to a contralateral human bone is detected significantly more often in the tumors producing soluble syndecan-1 than in controls. Thus, high levels of soluble syndecan-1 present in patients with myeloma may contribute directly to the growth and dissemination of the malignant cells and thus to poor prognosis.