Molecules secreted by potential target cells may interfere with cationic lipid-mediated gene transfer. This has been studied using human lung fibroblasts and human epidermoid lung cancer cells. Secreted cell medium components caused a substantial decrease both in the uptake of cationic lipid-DNA complexes (2-4-fold) and in reporter gene expression (100-1000-fold). Metabolic labeling of the cell medium showed that especially [35S]sulfate-labeled macromolecules competed with DNA for binding to the cationic lipid. Release of DNA from the cationic lipid by cell medium components was demonstrated by an ethidium bromide intercalation assay. In the presence of the cationic lipid, the secreted macromolecules were internalized by the cells. By enzymatic digestions, it was shown that the competing macromolecules consist of chondroitin/dermatan sulfate and heparan sulfate proteoglycans and that the effects on transfection were mediated by the polyanionic glycosaminoglycan portion of the proteoglycan. Accordingly, pretreatment of cell medium with the polycationic peptide protamine sulfate abrogated the inhibitory effects on gene transfer. Fluorescence microscopy studies revealed that heparan sulfate, internalized as a complex with cationic lipids, accumulated in the cell nuclei. These results support the view that the lack of specificity of this type of gene transfer vehicle is a major hindrance to efficient and safe in vivo administration.