Syndecan-4 is a transmembrane heparan sulfate proteoglycan that co-operates with integrins during cellmatrix interactions for the assembly of focal adhesions and actin stress fibers and in the phosphorylation of focal adhesion kinase (FAK) on Tyr 397 . These cellular events are regulated by the small GTPase Rho, and in the absence of syndecan-4 ligation, cellular levels of GTP-bound Rho are decreased implicating syndecan-4 in the regulation of the small GTPases. In the present study we report that, compared with wild type cells, fibronectin-adherent syndecan-4-null fibroblasts showed enhanced lamellipodia and increased Rac1 activity that could be down-regulated by re-expression of syndecan-4 in the mutant cells. Consistent with the role for Rac1 in activating p38 and JNK signaling, syndecan-4-null cells display higher levels of active p38 MAPK and JNK that were abolished by the expression of a dominant-negative RacN17 mutant. Since p38 and JNK regulate gene expression by phosphorylating and activating transcription factors, we compared both the phosphorylation state and the transcriptional activity of the ATF-2 transcription factor, as a direct p38 and JNK target in syndecan-4-null and wild type cells. In the absence of syndecan-4, both ATF-2 phosphorylation and transcriptional activity were significantly more elevated compared with wild type cells, and both activities were decreased either by the re-expression of syndecan-4 or by the expression of RacN17. Our results reveal a novel function for syndecan-4 in modulating nuclear transcriptional activity and indicate an underlying mechanism that acts at the level of Rac1-p38/JNK signaling.The syndecans make up a family of four transmembrane heparan sulfate proteoglycans that, by virtue of their heparan sulfate side chains, can bind insoluble ligands such as extracellular matrix (ECM) 1 molecules and soluble ligands such as growth factors (1). Of all the syndecans, syndecan-4 is the most ubiquitously expressed. Of the remaining family members, syndecan-1 is primarily expressed in epithelia, syndecan-2 in connective tissue, and syndecan-3 in nervous tissues. A number of studies have shown that syndecan-4 is important in adapting to physiological stresses. Its expression is up-regulated in response to hypoxia (2) and to mechanical stress (3, 4). Loss of syndecan-4 in mice results in defective renal function (5), increased mortality due to septic shock (6), and in delayed wound healing due to a reduction in cell migration and impaired angiogenesis in the granulation tissue (7). A number of studies implicate syndecan-4 in the regulation of the small GTPase Rho in events associated with cell attachment and migration. First, syndecan-4 co-operates, in a Rhomediated manner, with integrins in the assembly of focal adhesions and actin stress fibers when cells adhere to the ECM molecule fibronectin (FN) (8). Focal adhesions are macromolecular complexes that are composed of transmembrane receptors and structural and signaling cytoplasmic molecules. Integrins and syndecan-4 ar...