Heparanase is an endoglycosidase that degrades heparan sulfate chains of heparan sulfate proteoglycans, a key component of extracellular matrix and basement membranes. Studies using heparanase inhibitors and gene silencing have provided evidence to support an important role for heparanase in tumor metastasis and angiogenesis. The expression of heparanase is normally very tightly controlled however it is commonly deregulated in tumor cells, which express elevated heparanase activity that correlates with high levels of heparanase mRNA. We recently identified the transcription factor early growth response gene 1, EGR1, as a key regulator of inducible heparanase transcription in T cells. In this study using chromatin immunoprecipitation, we demonstrate for the first time that EGR1 binds to the heparanase gene promoter in vivo. The important question of the role of EGR1 in regulating heparanase transcription in tumor cells was then assessed. Studies were carried out in four epithelial tumor lines of different tissue origin. Functional dissection of the heparanase promoter identified a 280-bp region that was critical for transcription of the heparanase gene. Trans-activation studies using an EGR1 expression vector co-transfected with a reporter construct containing the 280-bp region showed EGR1 activated heparanase promoter activity in a dose-dependent manner in prostate or breast adenocarcinoma and colon carcinoma cell lines. In contrast, over-expression of EGR1 resulted in a dose-dependent repression of promoter activity in melanoma cells. Using site-directed mutagenesis the 280-bp region was found to contain two functional EGR1 sites and electrophoretic mobility shift assays showed binding of EGR1 to both these sites upon activation of tumor cells. Furthermore, the heparanase promoter region containing the EGR1 sites was also inducible in tumor cells and induction corresponded to HPSE expression levels. These studies show that EGR1 regulates heparanase transcription in tumor cells and importantly, can have a repressive or activating role depending on the tumor type.