The endothelial glycocalyx (eGC) is a carbohydrate-rich layer on the vascular endothelium, and its damage can lead to endothelial and organ dysfunction. Heparanase (HPSE) degrades the eGC in response to cellular stress, but its role in organ dysfunction remains unclear. This study investigates HPSE's role in lung ischemia–reperfusion (I/R) injury. A left lung hilar occlusion model was used in B6 wildtype (WT) and HPSE genetic knockout (^−/−) mice to induce I/R injury in vivo. The left lungs were ischemic for 1 h followed by reperfusion for 4 h prior to investigations of lung function and eGC status. Data were compared between uninjured lungs and I/R-injured lungs in WT and HPSE^−/− mice. WT lungs showed significant functional impairment after I/R injury, whereas HPSE^−/− lungs did not. Inhibition or knockout of HPSE prevented eGC damage, inflammation, and cellular migration after I/R injury by reducing matrix metalloproteinase activities. HPSE^−/− mice exhibited compensatory regulation of related gene expressions. HPSE facilitates eGC degradation leading to inflammation and impaired lung function after I/R injury. HPSE may be a therapeutic target to attenuate graft damage in lung transplantation.