Curative therapy for medulloblastoma and other pediatric embryonal brain tumors has improved, but the outcome still remains poor and current treatment causes long-term complications. Malignant brain tumors infiltrate the healthy brain tissue and, thus despite resection, cells that have already migrated cause rapid tumor regrowth. Heparan sulfate proteoglycans (HSPG), major components of the extracellular matrix (ECM), modulate the activities of a variety of proteins. The major enzyme that degrades HS, heparanase (HPSE), is an important regulator of the ECM. Here, we report that the levels of HPSE in pediatric brain tumors are higher than in healthy brain tissue and that treatment of pediatric brain tumor cells with HPSE stimulated their growth. In addition, the latent, 65 kDa form of HPSE (that requires intracellular enzymatic processing for activation) enhanced cell viability and rapidly activated the ERK and AKT signaling pathways, before enzymatically active HPSE was detected. The HPSE inhibitor PG545 efficiently killed pediatric brain tumor cells, but not normal human astrocytes, and this compound also reduced tumor cell invasion in vitro and potently reduced the size of flank tumors in vivo. Our findings indicate that HPSE in malignant brain tumors affects both the tumor cells themselves and their ECM. In conclusion, HPSE plays a substantial role in childhood brain tumors, by contributing to tumor aggressiveness and thereby represents a potential therapeutic target. Mol Cancer Ther; 16(8); 1–12. ©2017 AACR.