Tumor metastasis involves cancer cell invasion across basement membranes and interstitial tissues. The initial invasion step consists of adherence of the tumor cell to the extracellular matrix (ECM), and this binding transduces a variety of signals from the ECM to the tumor cell. Accordingly, it is critical to establish the mechanisms by which extracellular cues influence the intracellular activities that regulate tumor cell invasion. Here, we found that invasion of the basal-like breast cancer cell line BT-549 is enhanced by the ECM component chondroitin sulfates (CSs). CSs interacted with and induced proteolytic cleavage of N-cadherin in the BT-549 cells, yielding a C-terminal intracellular N-cadherin fragment that formed a complex with β-catenin. Of note, the cleavage of N-cadherin increased cytoplasmic and nuclear β-catenin levels; induced the matrix metalloproteinase 9 () gene, a target of β-catenin nuclear signaling; and augmented the invasion potential of the cells. We also found that CS-induced N-cadherin proteolysis requires caveolae-mediated endocytosis. An inhibitor of that process, nystatin, blocked both the endocytosis and proteolytic cleavage of N-cadherin induced by CS and also suppressed BT-549 cell invasion. Knock-out of chondroitin 4--sulfotransferase-1 (C4ST-1), a key CS biosynthetic enzyme, suppressed activation of the N-cadherin/β-catenin pathway through N-cadherin endocytosis and significantly decreased BT-549 cell invasion. These results suggest that CSs produced by C4ST-1 might be useful therapeutic targets in the management of basal-like breast cancers.