Deregulated expression of SPARC/osteonectin, a secreted glycoprotein with multiple biological functions, has been associated with the progression of various cancers. Using microarrays, we previously identified SPARC as one of the genes induced by treatment with a DNA methylation inhibitor in pancreatic cancer cells. We therefore analysed the expression pattern and methylation status of the SPARC gene in pancreatic cancer. Gene expression profiling by oligonucleotide microarray and reverse transcription–PCR analyses demonstrated that SPARC mRNA was expressed in non-neoplastic pancreatic ductal epithelial cells, but was not expressed in a majority of pancreatic cancer cell lines. The loss of SPARC expression was associated with aberrant hypermethylation of its CpG island. Immunohistochemical labeling revealed that the SPARC protein was overexpressed in the stromal fibroblasts immediately adjacent to the neoplastic epithelium in primary pancreatic cancers, but rarely expressed in the cancers themselves. Primary fibroblasts derived from pancreatic cancer strongly expressed SPARC mRNA and secreted SPARC protein into the conditioned media, and treatment of pancreatic cancer cells with exogenous SPARC resulted in growth suppression. SPARC expression in fibroblasts from noncancerous pancreatic tissue was augmented by coculture with pancreatic cancer cells. These findings suggest that SPARC is a frequent target for aberrant methylation in pancreatic cancer and that SPARC expression in fibroblasts adjacent to pancreatic cancer cells is regulated through tumor–stromal interactions.