CD44 alternative splicing has been implicated in the regulation of CD44 function. CD44 undergoes significant posttranslational modification in all cells, but the functional consequences of these modifications are poorly understood. In the current study, we have demonstrated that keratan sulfate modification of CD44 significantly modulates its ability to bind to hyaluronate. We observed naturally occurring differences in CD44 keratan sulfate substitution between two clonal variants of the KM12 human colon carcinoma cell line. CD44 on the highly metastatic KM12L4 clone is more heavily substituted with keratan sulfate than CD44 on the poorly metastatic KM12C6 clone. Moreover, CD44H on KM12L4 bound to hyaluronate poorly compared to CD44H on KM12C6. Removal of keratan sulfate from CD44 greatly enhanced CD44-mediated cell adhesion to hyaluronate. Removal of keratan sulfate from CD44H-immunoglobulin fusion proteins also enhanced their adhesion to hyaluronate. The influence of glycosaminoglycan substitution on CD44 function was specific to keratan sulfate substitution; treatment to remove chondroitin sulfate, heparan sulfate, or hyaluronate did not affect CD44-mediated cell adhesion to hyaluronate. Use of site-directed CD44H cDNA mutants with arginine changed to alanine at position 41 indicated that keratan sulfate modification of CD44 modulates hyaluronate adhesion through its B loop domain. These findings suggest that keratan sulfate modification of CD44 may play an important regulatory role in the broad spectrum of biological processes attributed to CD44, including normal development, tumor progression, and lymphocyte function.