The cell surface heparan sulfate proteoglycan (HSPG) glypican-1 is up-regulated by pancreatic and breast cancer cells, and its removal renders such cells insensitive to many growth factors. We sought to explain why the cell surface HSPG syndecan-1, which is also up-regulated by these cells and is a known growth factor coreceptor, does not compensate for glypican-1 loss. We show that the initial responses of these cells to the growth factor FGF2 are not glypican dependent, but they become so over time as FGF2 induces shedding of syndecan-1. Manipulations that retain syndecan-1 on the cell surface make long-term FGF2 responses glypican independent, whereas those that trigger syndecan-1 shedding make initial FGF2 responses glypican dependent. We further show that syndecan-1 shedding is mediated by matrix metalloproteinase-7 (MMP7), which, being anchored to cells by HSPGs, also causes its own release in a complex with syndecan-1 ectodomains. These results support a specific role for shed syndecan-1 or MMP7–syndecan-1 complexes in tumor progression and add to accumulating evidence that syndecans and glypicans have nonequivalent functions in vivo.