Ultrastructural and immunohistochemical studies were performed to clarify the localization of heparan sulfate proteoglycans (HSPG) and their role in cell-cell and/or cell-matrix interaction of bone cells. Ultrastructural observations using the freeze-substitution method revealed electron-dense undercoat structures on the cytoplasmic side of plasma membranes and extracellular matrices in the intercellular spaces where stromal cells came in contact with hematopoietic cells and/or osteoclasts. Immunohistochemical localization of HSPG in rat tibiae was examined using monoclonal antibody directed to glycosaminoglycan of HSPG by confocal laser scanning microscopy and transmission electron microscopy. Intense immunoreactivity was detected on the basement membranes of blood vessels, as well as the plasma membranes of fibroblast-like cells surrounding them. Immunoreactivity was also seen on extracellular matrices between fibroblast-like cells and osteoclast lineage cells. In addition, osteoblasts showed moderate immunoreactivity on those plasma membranes attached to bone matrix. A postembedding method revealed gold particles in Golgi vacuoles of osteoblasts, indicating the localization of HSPG. In osteoclasts, HSPG was localized in Golgi apparatus and lysosomal structures. These findings suggest that (1) osteoblasts and osteoclast lineage cells synthesize HSPG; (2) both membrane and matrix HSPG are localized in bone tissue; and (3) HSPG may play an important role in cell-cell interaction between fibroblast-like cells and osteoclast lineage cells by reserving heparin binding growth factors and/or heparin binding adhesion molecules, such as fibronectin.