Syndecan-1 was overexpressed in T47D, MCF-7, or Hs578t human breast carcinoma cell lines, mimicking overexpression observed in carcinomas in vivo. Overexpression of syndecan-1, or its ectodomain alone fused to a glycosylphosphatidylinositol anchor (GPI-mS1ED), promotes cell rounding in 2D culture. Deletions within the syndecan-1 ectodomain (S1ED) implicate an active site within the core protein between the glycosaminoglycan attachment region and the transmembrane domain. Polyclonal antibodies directed against the ectodomain, or treatment with the tyrosine kinase inhibitor genistein, block activity and revert GPI-mS1ED overexpressing cells to a normal morphology. Extracellular matrix (ECM)-dependent signaling appears to be targeted, as GPI-mS1ED cells attach and spread similarly to control cells in response to E-cadherin engagement, but fail to spread on integrin-dependent ligands. However, integrin-dependent cell attachment, and integrin activation and subsequent FAK phosphorylation are unaffected, suggesting that the syndecan regulates the integration of signaling following matrix adhesion. In 3D culture, where syndecan-1 may have a more critical role in cell behavior, the disrupted signaling leads to poorly cohesive, invasive colonies. Thus, altered matrix-dependent signaling due to increased levels of cell surface syndecan-1 may lead to epithelial cell invasion during early stages of tumorigenesis.