In vitro experiments suggest that glycosaminoglycans (GAGs) and the proteins to which they are attached (proteoglycans) are important for modulating growth factor signaling. However, in vivo evidence to support this view has been lacking, in part because mutations that disrupt the production of GAG polymers and the core proteins have not been available. Here we describe the identification and characterization of Drosophila mutants in the suppenkasper (ska) gene. The ska gene encodes UDP-glucose dehydrogenase which produces glucuronic acid, an essential component for the synthesis of heparan and chondroitin sulfate. ska mutants fail to put heparan side chains on proteoglycans such as Syndecan. Surprisingly, mutant embryos produced by germ-line clones of this general metabolic gene exhibit embryonic cuticle phenotypes strikingly similar to those that result from loss-of-function mutations in genes of the Wingless (Wg) signaling pathway. Zygotic loss of ska leads to reduced growth of imaginal discs and pattern defects similar to wg mutants. In addition, genetic interactions of ska with wg and dishevelled mutants are observed. These data demonstrate the importance of proteoglycans and GAGs in Wg signaling in vivo and suggest that Wnt-like growth factors may be particularly sensitive to perturbations of GAG biosynthesis.