The syndecan family of heparan sulfate proteoglycans contributes to cell adhesion and communication by serving as co-receptors for cell signaling and extracellular matrix molecules. Syndecan-2 is located at the cell surface, and we previously reported that it induces matrix metalloproteinase-7 (MMP-7) expression in colon cancer cells. However, the underlying regulatory mechanisms are unknown. Here, we report that overexpression of syndecan-2 in HT-29 colon cancer cells increases the phosphorylation of focal adhesion kinase (FAK) and ERK in parallel with up-regulated MMP-7 expression, but a syndecan-2 mutant lacking the cytoplasmic domain showed significant reductions in these effects. Consistent with this observation, FAK inhibition via FAK-related non-kinase expression or inhibition of ERK with the ERK1/2 inhibitor SCH772984 diminished the syndecan-2–mediated up-regulation of MMP-7. Activation of PKC enhanced syndecan-2–mediated MMP-7 expression, whereas inhibition of PKC had the opposite effect. Of note, the exogenous expression of syndecan-2 triggered localization of PKC to the membrane. Expression of syndecan-2 harboring a phosphomimetic (S198E) mutation of the variable region of the cytoplasmic domain enhanced MMP-7 expression and FAK phosphorylation. Finally, experimental suppression of shedding of the syndecan-2 extracellular domain did not significantly affect the syndecan-2–mediated up-regulation of MMP-7 in the early period after syndecan-2 overexpression. Taken together, these findings suggest that syndecan-2’s cytoplasmic domain up-regulates MMP-7 expression in colon cancer cells via PKC-mediated activation of FAK/ERK signaling.