Decorin is a member of the family of the small leucine-rich proteoglycans. In addition to its function as an extracellular matrix organizer, it has the ability to activate the epidermal growth factor receptor, and it forms complexes with various isoforms of transforming growth factor beta (TGF-beta). Decorin is expressed during skeletal muscle differentiation and is up-regulated in dystrophic muscle. In this study we investigated the role of decorin in TGF-beta-dependent inhibition of myogenesis. To probe the function of decorin during myogenesis, C(2)C(12) myoblasts were stably transfected with a plasmid expressing antisense decorin mRNA. The resulting inhibition of decorin expression led to the expression of myogenin, a master transcription factor for muscle differentiation, under growth conditions and accelerated skeletal muscle differentiation as determined by the expression of creatine kinase. In contrast myogenin expression was inhibited by adenovirally induced decorin expression or by adding exogenous decorin. Reduced synthesis of decorin resulted in a 7-fold decreased sensitivity to TGF-beta-mediated inhibition of myogenin expression. In contrast, adenovirally induced decorin expression in wild type cells resulted in a 5-fold increased sensitivity to TGF-beta-mediated inhibition of myogenin expression. Transfection studies with the TGF-beta-dependent promoter of the plasminogen activator inhibitor-1 coupled with luciferase revealed that the transducing receptors for TGF-beta1 and TGF-beta2 were involved in the different responses of wild type and antisense decorin myoblasts. These results demonstrate that a reduction of decorin expression or of decorin availability results in a decreased responsiveness to TGF-beta. These findings strongly suggest a new role for decorin during skeletal muscle terminal differentiation by activating TGF-beta-dependent signaling pathways.