Syndecan-1 is a heparan sulfate proteoglycan expressed on the surface of, and actively shed by, myeloma cells. Hepatocyte growth factor (HGF) is a cytokine produced by myeloma cells. Previous studies have demonstrated elevated levels of syndecan-1 and HGF in the serum of patients with myeloma, both of negative prognostic value for the disease. Here we show that the median concentrations of syndecan-1 (900 ng/mL) and HGF (6 ng/mL) in the marrow compartment of patients with myeloma are highly elevated compared with healthy controls and controls with other diseases. We show that syndecan-1 isolated from the marrow of patients with myeloma seems to exist in an intact form, with glucosaminoglycan chains. Because HGF is a heparan-sulfate binding cytokine, we examined whether it interacted with soluble syndecan-1. In supernatants from myeloma cells in culture as well as in pleural effusions from patients with myeloma, HGF existed in a complex with soluble syndecan-1. Washing myeloma cells with purified soluble syndecan-1 could effectively displace HGF from the cell surface, suggesting that soluble syndecan-1 can act as a carrier for HGF in vivo. Finally, using a sensitive HGF bioassay (interleukin-11 production from the osteosarcoma cell line Saos-2) and intact syndecan-1 isolated from the U-266 myeloma cell line, we found that the presence of high concentrations of syndecan-1 (more than 3 microg/mL) inhibited the HGF effect, whereas lower concentrations potentiated it. HGF is only one of several heparin-binding cytokines associated with myeloma. These data indicate that soluble syndecan-1 may participate in the pathology of myeloma by modulating cytokine activity within the bone marrow.