Vascular endothelial growth factor (VEGF)-driven increase in vascular permeability is a key feature of many disease states associated with inflammation and ischemic injury, contributing significantly to morbidity and mortality in these settings. Despite its importance, no specific regulators that preferentially control a VEGF-dependent increase in permeability versus its other biological activities have been identified. Here, we report that a proteoglycan, Syndecan-2 (Sdc2), regulates the interaction between a transmembrane phosphatase, DEP1, and VEGFR2 by controlling cell surface levels of DEP1. In the absence of Sdc2 or the presence of an antibody that blocks the Sdc2–DEP1 interaction, increased plasma membrane DEP1 levels promote selective dephosphorylation of the VEGFR2 Y951 site that is involved in permeability control. Either an endothelial-specific Sdc2 deletion or a treatment with an anti-Sdc2 antibody results in a marked reduction in stroke size due to a decrease in intracerebral edema. Corti et al. show that the proteoglycan Syndecan-2 (Sdc2) regulates the interaction between phosphatase DEP1 and the vascular endothelial growth factor receptor VEGFR2. Depletion or antibody-mediated inhibition of Sdc2 causes compromised internalization of DEP1, and excessive expression of DEP1 in the membrane results in large dephosphorylation specifically of VEGFR2 Y951 residue, leading to reduced VEGF-mediated permeabilization without affecting other VEGF-mediated functions, with beneficial effects in animal models of skin edema and brain focal stroke.