A synthetic peptide, which was shown to bind extracellular matrix heparan sulfate chains with a high degree of affinity and specificity [Colburn et al. (1996): Arch Biochem Biophys 325:129-138], has now been found to promote the transfer and the deposition of endothelial cell surface proteoglycans in the extracellular matrix. The peptide also induces preferential binding of extracellular matrix heparan sulfate proteoglycans, which have been added to the supernatant growth medium, and the requirement for its presence is stringent in that only a negligible amount of proteoglycans are bound to the cell layer in the absence of the peptide. In addition, antibodies directed against the peptide detect the accumulation of the peptide in the matrix compartment where the peptide is found associated with the proteoglycans transferred from the cell surface. The sequence of events induced by the peptide appears to be an extension of a naturally occurring process since proteoglycans with properties similar to those of the species ordinarily present in the extracellular matrix have been observed to transfer from the cell surface to the matrix during a pulse-chase experiment. We suggest that formation of the complex peptide-proteoglycan with consequent displacement of the proteoglycan from its anchorage on the cell initiates the process of transfer of the heparan sulfate-bound peptide from the cell surface to the extracellular matrix.