The syndecans are a type of cell surface adhesion receptor that initiates intracellular signaling events through receptor clustering mediated by their highly conserved transmembrane domains (TMDs). However, the exact function of the syndecan TMD is not yet fully understood. Here, we investigated the specific regulatory role of the syndecan-2 TMD.Wefound that syn-decan-2 mutants in which theTMDhad been replaced with that of syndecan-4 were defective in syndecan-2-mediated functions, suggesting that theTMDof syndecan-2 plays one or more specific roles. Interestingly, syndecan-2 has a stronger tendency to form sodium dodecyl sulfate (SDS)-resistant homodimers than syndecan-4. Our structural studies showed that a unique phenylalanine residue (Phe167) enables an additional molecular interaction between the TMDs of the syndecan-2 homodimer. The presence of Phe167 was correlated with a higher tendency toward oligomerization, and its replacement with isoleucine significantly reduced the SDS-resistant dimer formation and cellular functions of syndecan-2 (e.g. cell migration). Conversely, replacement of isoleucine with phenylalanine at this position in the syndecan-4TMDrescued the defects observed in a mutant syndecan-2 harboring the syndecan-4 TMD. Taken together, these data suggest that Phe167 in the TMD of synde-can-2 endows the protein with specific functions. Our work offers new insights into the signaling mediated by the TMD of syndecan family members.