Expression patterns of syndecan-1, the cell surface heparan sulfate proteoglycan (HSPG) predominant on epithelial cells, were analyzed in tissue samples from 30 infiltrating human breast carcinomas and in 9 human breast carcinoma cell lines. Immunohistochemical staining demonstrates that while a subset of the breast carcinomas lose syndecan-1, this proteoglycan is expressed or overexpressed in a majority of the cases. Interestingly, cells in poor grade tumors contain intracellular syndecan-1, an observation that has not been previously described and was thus further investigated. Examination of cultured breast carcinoma cell lines indicates that they also display the phenotype of the syndecan-1 positive tumors and thereby provide a model system for analysis of intracellular syndecan-1. All cell lines examined express syndecan-1, and poorly differentiated lines such as BT549 cells internalize the proteoglycan from the cell surface where it accumulates as intact HSPG in intracellular vesicles. Colocalization studies using fluorescent markers identify these to be lysosomes. This finding is unexpected, as the accepted mechanism for degradation of syndecan HSPG following endocytosis is fragmentation of the protein core and glycosaminoglycan chains in endosomes, followed by delivery of the fragments to lysosomes. Lysosomal inactivation using ammonium chloride demonstrates that well-differentiated lines such as T47D and MCF-7 cells, which maintain the majority of syndecan-1 on their cell surfaces, also target intact constitutively endocytosed syndecan-1 to lysosomes. Taken together, these results suggest that mammary epithelial cells utilize a previously uncharacterized mechanism for syndecan-1 catabolism. In this pathway the proteoglycan remains intact as it passes through the endosomal system, prior to arriving at its site of intracellular degradation in lysosomes.