The transmembrane proteoglycan Syndecan contributes to cell surface signaling of diverse ligands in mammals, yet in Drosophila, genetic evidence links Syndecan only to the Slit receptor Roundabout and to the receptor tyrosine phosphatase LAR. Here we characterize the requirement for syndecan in the determination and morphogenesis of the Drosophila heart, and reveal two phases of activity, indicating that Syndecan is a co-factor in at least two signaling events in this tissue. There is a stochastic failure to determine heart cell progenitors in a subset of abdominal hemisegments in embryos mutant for syndecan, and subsequent to Syndecan depletion by RNA interference. This phenotype is sensitive to gene dosage in the FGF receptor (Heartless), its ligand, Pyramus, as well as BMP-ligand Decapentaplegic (Dpp) and co-factor Sara. Syndecan is also required for lumen formation during assembly of the heart vessel, a phenotype shared with mutations in the Slit and Integrin signaling pathways. Phenotypic interactions of syndecan with slit and Integrin mutants suggest intersecting function, consistent with Syndecan acting as a co-receptor for Slit in the Drosophila heart.