SUMMARYHB-EGF, a member of the EGF family of growth factors, plays an important role in cardiac valve development by suppressing mesenchymal cell proliferation. Here, we show that HB-EGF must interact with heparan sulfate proteoglycans (HSPGs) to properly function in this process. In developing valves, HB-EGF is synthesized in endocardial cells but accumulates in the mesenchyme by interacting with HSPGs. Disrupting the interaction between HB-EGF and HSPGs in an ex vivo model of endocardial cushion explants resulted in increased mesenchymal cell proliferation. Moreover, homozygous knock-in mice (HB hb/hb ) expressing a mutant HB-EGF that cannot bind to HSPGs developed enlarged cardiac valves with hyperproliferation of mesenchymal cells; this resulted in a phenotype that resembled that of Hbegf-null mice. Interestingly, although Hbegf-null mice had abnormal heart chambers and lung alveoli, HB hb/hb mice did not exhibit these defects. These results indicate that interactions with HSPGs are essential for the function of HB-EGF, especially in cardiac valve development, in which HB-EGF suppresses mesenchymal cell proliferation.