Infiltrating carcinomas characteristically elicit a reactive stromal response, and accumulating evidence indicates that tumor stroma fibroblasts reciprocally promote tumor development and growth. The cell surface heparan sulfate proteoglycan, syndecan-1 (Sdc1), is thought to function as a coreceptor for growth factor and extracellular matrix interactions, and Sdc1 expression is induced in reactive stromal cells in both mice and man. Mice with a targeted mutation in Sdc1 show reduced tumor development in response to oncogene expression and altered responses to other pathological stimuli that are associated with the induction of stromal Sdc1. Here, we test the hypothesis that Sdc1 is required for the growth-promoting activities of reactive stroma. We found that when highly invasive carcinoma cells (MDA-MB-231) were placed in contact with mouse embryonic fibroblasts (MEFs) in a coculture model, Sdc1 expression was induced. Sdc1 was not induced by less invasive or normal cell lines (T47D and NMuMG). Furthermore, the growth of MDA-MB-231 cells was enhanced by 42% when cocultured with Sdc1+/+ MEFs compared with Sdc1-/- MEFs. When T47D cells were cocultured with fibroblasts that expressed transfected Sdc1, these Sdc1-positive fibroblasts stimulated growth of the breast epithelial cells by 85% compared with untransfected controls. The growth-promoting effect was completely abolished when fibroblasts were transfected with mutant Sdc1 lacking heparan sulfate attachment sites. In conclusion, we have demonstrated that a growth-promoting loop exists between breast cancer cells and their stroma that depends on the activity of glycanated Sdc1.