Transglutaminases form a family of proteins that have evolved for specialized functions such as protein crosslinking in haemostasis, semen coagulation, or keratinocyte cornified envelope formation. In contrast to the other members of this protein family, tissue transglutaminase is a multifunctional enzyme apparently involved in very disparate biological processes. By virtue of its reciprocal Ca2+-dependent crosslinking activity or GTP-dependent signal transducing activity, tissue transglutaminase exhibits true multifunctionality at the molecular level. The crosslinking activity can subserve disparate biological phenomena depending on the location of the target proteins. Intracellular activation of tissue transglutaminase can give rise to crosslinked protein envelopes in apoptotic cells, whereas extracellular activation contributes to stabilization of the extracellular matrix and promotes cell-substrate interaction. While tissue transglutaminase synthesis and activation is normally part of a protective cellular response contributing to tissue homeostasis, the enzyme has also been implicated in a number of pathological conditions including fibrosis, atherosclerosis, neurodegenerative diseases, celiac disease, and cancer metastasis. This review discusses the role of transglutaminases in extracellular matrix crosslinking with a focus on the multifunctional enzyme tissue transglutaminase.