A procedure for isolation of proteoglycans (PG) from rat liver and lung has been developed. The effect of PG on DNA and RNA synthesis in fragments of mouse embryo tissue was investigated. PG were shown to inhibit DNA synthesis. This effect was tissue-specific but species-nonspecific. Under the same conditions various glycosaminoglycans (chondroitin sulfates and heparin) had no effect on DNA synthesis. No effect of PG on RNA synthesis was observed. Possible mechanisms of PG effect are discussed.