Elucidation of the molecular structure of heparan sulfate (HS) is the key to understanding its functional versatility as a co-receptor for growth factors and morphogens. We have identified and exploited the novel substrate specificity of the coliphage K5 lyase in studies of the domain organization of HS. We show that K5 lyase cleaves HS principally within non-sulfated sequences of four or more N-acetylated disaccharides. Uniquely, sections comprising alternating N-acetylated and N-sulfated units are resistant to the enzyme, as are the highly sulfated S domains. Spacing of the K5 lyase cleavage sites ( approximately 7-8 kDa) is similar to that of the S domains. On the basis of these findings, we propose a refined model of the structure of HS in which N-acetylated sequences of four to five disaccharide units (GlcNAc-GlcUA)(4-5) are positioned centrally between the S domains. The latter are embedded within N-acetylated and N-sulfated sequences, forming extended regions of hypervariable sulfation distributed at regular intervals along the polymer chain. K5 lyase provides a means of excision of these composite sulfated regions for structural and functional analyses.