Raji cells expressing syndecan-1 (Raji-S1) adhere and spread when plated on heparan sulfate-binding extracellular matrix ligands or monoclonal antibody 281.2, an antibody directed against the syndecan-1 extracellular domain. Cells plated on monoclonal antibody 281.2 initially extend a broad lamellipodium, a response accompanied by membrane ruffling at the cell margin. Membrane ruffling then becomes polarized, leading to an elongated cell morphology. Previous work demonstrated that the syndecan-1 cytoplasmic domain is not required for these activities, suggesting important roles for the syndecan-1 transmembrane and/or extracellular domains in the assembly of a signaling complex necessary for spreading. Work described here demonstrates that truncation of the syndecan-1 extracellular domain does not affect the initial lamellipodial extension in the Raji-S1 cells but does inhibit the active membrane ruffling that is necessary for cell polarization. Replacement of the entire syndecan-1 transmembrane domain with leucine residues completely blocks the cell spreading. These data demonstrate that the syndecan-1 transmembrane and extracellular domains have important but distinct roles in Raji-S1 cell spreading; the extracellular domain mediates an interaction that is necessary for dynamic cytoskeletal rearrangements whereas an interaction of the transmembrane domain is required for the initial spreading response.