Heparan sulphate has been reported to be present in rat embryos. It is covalently linked to a core protein as heparan sulphate proteoglycan (HSPG). Heparitinase specifically degrades heparan sulphate, thus treatment of rat embryos with this enzyme in vitro should result in the perturbation of any tissue interactions which involve heparan sulphate proteoglycan. In this study heparitinase was either added to the culture medium or microinjected directly into the amniotic cavity. Heparitinase treatment resulted in abnormal development of the whole embryo, but the earliest effects were observed in the cranial region. Forebrain development was grossly abnormal: the neural folds remained widely open, with beak-like outgrowths rostrally. Optic sulci failed to develop. The midbrain and rostral hindbrain neural folds also remained widely open. In the trunk, where the pattern of neurulation is less complex than in the cranial region, rostral neural tube closure did occur although the morphology of the closed region was far from normal. These results suggest that heparan sulphate proteoglycan is essential for normal neurulation. Epithelial somite formation was perturbed, but neural crest cell emigration, otic pit formation and pharyngeal arch formation, all important morphogenetic events which occur during this period of development, were not inhibited by heparitinase treatment. Prolonged (44 h) exposure to the enzyme resulted in the conversion of the embryonic structure to a much simpler form: mesenchymal cells (stellate or spindle-shaped) enclosed within a simple epithelial coating.