Previous studies had shown that binding of TGF-beta to the small proteoglycan decorin results in its inactivation. Indeed, in osteosarcoma cells the addition of decorin prevented the TGF-beta 1-mediated up-regulation of biglycan synthesis. However, the down-regulation of proteoglycan-100 remained unaltered. Even in the presence of a 100,000-fold molar excess of decorin, TGF-beta 1 was fully active in U937 monocytes with respect to the inhibition of cell proliferation. There was no inhibition of the TGF-beta-mediated stimulation of the retraction of fibroblast-populated collagen lattices. Thus, the formation of TGF-beta/decorin complexes leads to the neutralization of distinct effects only.