Complex formation of transforming growth factor-beta (TGF-beta) with the small proteoglycan decorin has been considered to inactivate the cytokine. However, neither the TGF-beta-mediated stimulation of the retraction of collagen lattices in culture nor the enhanced transcription of biglycan were influenced by an excess of native decorin in the culture medium. In contrast, when MG-63 osteosarcoma cells were transfected with sense- or antisense-decorin-cDNA, which led to an over- or under-expression of the proteoglycan, they responded to TGF-beta differently. An inverse correlation between decorin expression and the TGF-beta-mediated stimulation of collagen gel retraction and biglycan induction, respectively, was found. These results are best explained by assuming that decorin is not inactivating but sequestering TGF-beta in the extracellular matrix.