The initial steps in the catabolism of cell-associated heparan sulfate proteoglycans in Chinese hamster ovary (CHO) cells are similar to what has been observed in other cells, cell surface proteoglycans are internalized and the heparan sulfate glycosaminoglycans are released from core proteins and cleaved to small chains by intracellular heparanases. The mechanism of the release and cleavage reactions is unclear, since only intact proteoglycans and small, cleaved heparan sulfate chains are observed in pulse-chase experiments; however, it is thought that release of the glycosaminoglycans from core proteins precedes heparanase cleavage (Yanagishita, M., and Hascall, V. C. (1992) J. Biol. Chem. 267, 9451-9454). The relationship between these two steps were examined with the proteoglycan synthesis mutant pgsE-606 (Bame, K. J., and Esko, J. D. (1989) J. Biol. Chem. 264, 8059-8065), since the undersulfated heparan sulfate synthesized by the mutant is a poor substrate for heparanases. In addition to intact proteoglycans and small cleaved chains, a large glycosaminoglycan intermediate is present in pgsE-606 cells, suggesting that heparan sulfate is released from proteoglycans as large chains which are subsequently cleaved by heparanases. The catabolic intermediate in the mutant has been acted upon by heparanases, since it is smaller than the size of the heparan sulfate chains found on proteoglycans, raising the possibility that the glycosaminoglycans are first released from proteoglycans by an endoglycosidic cleavage of the chain before proteolysis of the core protein. To examine whether proteolysis of the core protein is required for endoglycosidic cleavage of the chain, heparan sulfate proteoglycans immobilized to Sepharose were incubated with CHO cell extracts in the presence of protease inhibitors. Heparan sulfate chains are released from the proteoglycans by heparanases in the cell extract, indicating that release of the glycosaminoglycans from core proteins is not a prerequisite for endoglycosidic cleavage of the chain. In addition, these studies indicate that there is a heparanase activity in CHO cells which can recognize and cleave sequences in the undersulfated heparan sulfate, but is unable to completely cleave the mutant glycosaminoglycan, suggesting that there may be multiple heparanase activities responsible for degrading the heparan sulfate chains.