While it has been long appreciated that sugar-modified proteins coat the cell surface, their functions are poorly understood. Here, I describe recent genetic studies that demonstrate that one class of sugar-modified proteins, cell-surface proteoglycans, play crucial roles in morphogenesis, growth regulation and tumor suppression. Mutations that affect individual proteoglycans or the enzymes required for glycosaminoglycan synthesis regulate Wingless and Decapentaplegic signaling in Drosophila, and body size in mice and humans. Compromising proteoglycan function is also associated with the development of Wilm's tumors and hereditary multiple exostoses. In this review, these biological findings are placed in the context of proteoglycan biochemistry and molecular function.