VEGF-D is an angiogenic and lymphangiogenic glycoprotein that can be proteolytically processed generating various forms differing in subunit composition due to the presence or absence of N- and C-terminal propeptides. These propeptides flank the central VEGF homology domain, that contains the binding sites for VEGF receptors (VEGFRs), but their biological functions were unclear. Characterization of propeptide function will be important to clarify which forms of VEGF-D are biologically active and therefore clinically relevant. Here we use VEGF-D mutants deficient in either propeptide, and in the capacity to process the remaining propeptide, to monitor the functions of these domains. We report for the first time that VEGF-D binds heparin, and that the C-terminal propeptide significantly enhances this interaction (removal of this propeptide from full-length VEGF-D completely prevents heparin binding). We also show that removal of either the N- or C-terminal propeptide is required for VEGF-D to drive formation of VEGFR-2/VEGFR-3 heterodimers which have recently been shown to positively regulate angiogenic sprouting. The mature form of VEGF-D, lacking both propeptides, can also promote formation of these receptor heterodimers. In a mouse tumor model, removal of only the C-terminal propeptide from full-length VEGF-D was sufficient to enhance angiogenesis and tumor growth. In contrast, removal of both propeptides is required for high rates of lymph node metastasis. The findings reported here show that the propeptides profoundly influence molecular interactions of VEGF-D with VEGF receptors, co-receptors, and heparin, and its effects on tumor biology.