Osteoarthritis is the most common form of human arthritis. We investigated the potential role of asporin, an extracellular matrix component expressed abundantly in the articular cartilage of individuals with osteoarthritis, in the pathogenesis of osteoarthritis. Here we report a significant association between a polymorphism in the aspartic acid (D) repeat of the gene encoding asporin (ASPN) and osteoarthritis. In two independent populations of individuals with knee osteoarthritis, the D14 allele of ASPN is over-represented relative to the common D13 allele, and its frequency increases with disease severity. The D14 allele is also over-represented in individuals with hip osteoarthritis. Asporin suppresses TGF-beta-mediated expression of the genes aggrecan (AGC1) and type II collagen (COL2A1) and reduced proteoglycan accumulation in an in vitro model of chondrogenesis. The effect on TGF-beta activity is allele-specific, with the D14 allele resulting in greater inhibition than other alleles. In vitro binding assays showed a direct interaction between asporin and TGF-beta. Taken together, these findings provide another functional link between extracellular matrix proteins, TGF-beta activity and disease, suggesting new therapeutic strategies for osteoarthritis.