Heparan sulfate (HS) proteoglycans (HSPGs) bind to multiple growth factors/morphogens and regulate their signaling. 6-O-sulfation (6S) of glucosamine within HS chains is critical for many of these ligand interactions. Sulf-1 and Sulf-2, which are extracellular neutral-pH sulfatases, provide a novel post-synthetic mechanism for regulation of HSPG function by removing 6S from intact HS chains. The Sulfs can thereby modulate several signaling pathways, including the promotion of Wnt signaling. We found induction of SULF2 transcripts and Sulf-2 protein in human lung adenocarcinoma and squamous cell carcinoma, the two major classes of non-small-cell lung carcinomas (NSCLCs). We confirmed widespread Sulf-2 protein expression in tumor cells of 10/10 surgical specimens of human lung squamous carcinomas. We studied five Sulf-2(+) NSCLC cell lines, including two, which were derived by cigarette-smoke transformation of bronchial epithelial cells. shRNA-mediated Sulf-2 knockdown in these lines caused an increase in 6S on their cell surface and in parallel reversed their transformed phenotype in vitro, eliminated autocrine Wnt signaling and strongly blunted xenograft tumor formation in nude mice. Conversely, forced Sulf-2 expression in non-malignant bronchial epithelial cells produced a partially transformed phenotype. Our findings support an essential role for Sulf-2 in lung cancer, the leading cancer killer.