Two mAbs raised against the 64-kD core protein of a membrane heparan sulfate proteoglycan from human lung fibroblasts also recognize a nonhydrophobic proteoglycan which accumulates in the culture medium of the cells. Pulse-chase studies suggest that the hydrophobic cell-associated forms act as precursors for the nonhydrophobic medium-released species. The core proteins of the medium-released proteoglycans are slightly smaller than those of the hydrophobic cell-associated species, but the NH2-terminal amino acid sequences of both forms are identical. The characterization of human lung fibroblast cDNAs that encode the message for these core proteins and the effect of bacterial phosphatidylinositol-specific phospholipase C suggest that the hydrophobic proteoglycan is membrane-anchored through a phospholipid tail. These data identify a novel membrane proteoglycan in human lung fibroblasts and imply that the shedding of this proteoglycan may be related to the presence of the phospholipid anchor.