PTPRD, a well‐established tumor suppressor gene, encodes the protein tyrosine phosphatase‐type D. This protein consists of three immunoglobulin‐like (Ig) domains, four to eight fibronectin type 3 (FN) domains, a single transmembrane segment, and two cytoplasmic tandem tyrosine phosphatase domains. PTPRD is known to harbor various cancer‐associated point mutations. While it is assumed that PTPRD regulates cellular functions as a tumor suppressor through the tyrosine phosphatase activity in the intracellular region, the function of its extracellular domain (ECD) in cancer is not well understood. In this study, we systematically examined the impact of 92 cancer‐associated point mutations within the ECD. We found that 69.6% (64 out of 92) of these mutations suppressed total protein expression and/or plasma membrane localization. Notably, almost all mutations (20 out of 21) within the region between the last FN domain and transmembrane segment affected protein expression and/or localization, highlighting the importance of this region for protein stability. We further found that some mutations within the Ig domains adjacent to the glycosaminoglycan‐binding pocket enhanced PTPRD's binding ability to heparan sulfate proteoglycans (HSPGs). This interaction is proposed to suppress phosphatase activity. Our findings therefore suggest that HSPG‐mediated attenuation of phosphatase activity may be involved in tumorigenic processes through PTPRD dysregulation. Receptor protein tyrosine phosphatase‐type D (PTPRD) is a well‐established tumor suppressor gene product. A systematic analysis of 92 cancer‐associated point mutations within the extracellular domain (ECD) revealed that 69.6% (64 out of 92) of them suppressed total protein expression and/or plasma membrane localization. Furthermore, some mutations within the Ig domains adjacent to the glycosaminoglycan‐binding pocket enhanced the interaction between PTPRD and heparan sulfate proteoglycans (HSPGs) suggesting HSPG‐mediated attenuation of phosphatase activity may be involved in tumorigenic processes through PTPRD dysregulation.