Biglycan and decorin are two members of a family of small extracellular matrix proteoglycans characterized by the presence of 10 leucine-rich repeats and one or two attachment sites for glucosaminoglycans. Both have thus far been described only from tetrapod species, mainly mammals. Because the extracellular matrix has played an important part in the evolution of Metazoa, the phylogeny of its components is of considerable interest. In this study, biglycan-like (BGL) cDNA sequences have been obtained from two teleost (Oreochromis cichlid and zebrafish) and two lamprey species. The analysis of the sequences suggests that, like tetrapods, the lampreys possess two types of proteoglycans, both of which are biglycan-like; decorin-like proteoglycans could not be identified in these species. The genes specifying these two types apparently arose by duplication in the lamprey lineage after its divergence from gnathostomes. The two teleost species possess a BGL proteoglycan and a bona fide decorin. The BGL proteoglycan is highly divergent from the tetrapod biglycan and related to the BGL proteoglycans of the lamprey. Hence, although the duplication generating the ancestors of biglycan and decorin genes occurred after the divergence of agnathans but before the emergence of teleosts, only decorin acquired its characteristic properties in the bony fishes. The BGL gene presumably turned into a typical biglycan only in the tetrapod lineages. The presumed acquisitions of new functions appear to have been accompanied by changes in the evolutionary rate.