Mutational inactivation of EXT1 or EXT2 is the cause of hereditary multiple osteochondromas. These genes function in heparan sulphate proteoglycan (HSPG) biosynthesis in the Golgi apparatus. Loss of heterozygosity of the EXT1 locus at 8q24 is frequently found in solitary osteochondromas, whereas somatic mutations are rarely found. We investigated the expression of EXT1 and EXT2 (quantitative RT-PCR) and of different HSPGs (immunohistochemistry) in solitary and hereditary osteochondromas and in cases with malignant progression to secondary peripheral chondrosarcoma, in relation to possible mutations and promoter methylation. The mutation status of patients with multiple osteochondromas correlated with decreased EXT1 or EXT2 expression found in their resected tumours. We could not show somatic point mutations or promoter hypermethylation in 17 solitary tumours; however, EXT1 expression was decreased in 15 cases, whereas EXT2 was not. Intracellular accumulation of syndecan-2 and heparan sulphate-bearing isoforms of CD44 (CD44v3) was found in most tumours, which concentrated in the Golgi apparatus as shown by confocal microscopy. This contrasted with the extracellular expression found in normal growth plates. In conclusion, mutational inactivation of either EXT1 or EXT2 leads to loss of mRNA expression of the corresponding gene. We hypothesize that loss of EXT expression disrupts the function of the EXT1/2 complex in HSPG biosynthesis, resulting in the intracellular accumulation of HSPG core proteins that we found in these tumours.