Heparan sulfate is abundantly present in the extracellular matrix. As other glycosaminoglycans, it is synthesized in the Golgi apparatus and then exposed on the cell surface. The glucuronidase activity of human heparanase plays a major role in the structural remodeling of the extracellular matrix, which underlies cell migration, hence tumor invasion. Heparanase is therefore a major target for anti-cancer treatment. Several inhibitors of its enzymatic activity have been synthesized. However, their design is limited by the absence of experimental structure of the protein. Homology modeling is proposed based on the structure of the endoxylanase from Penicillium simplicissimum co-crystallized with a series of xylan oligosaccharide. The new heparanase model is consistent with the few experimental data suited for the validation of such work. Furthermore, the presence of natural substrates in the template structure allowed us to propose a binding model for a hydrolyzed heparin sulfate pentasaccharide. Several lysine residues have been identified to play a key role in binding to the anionic polysaccharide substrate. In addition, two phenylalanine residues are also potentially important for the interaction with the substrate. The enzymatic mechanism investigated in the light of this new model allows for the proposal of several amino acids that can influence the protonation state of the nucleophile and the proton donor. © 2011 Wiley Periodicals, Inc. Biopolymers 97: 21–34, 2012.