Decorin is a small chondroitin-dermatan sulphate proteoglycan consisting of a core protein and a single glycosaminoglycan chain. Eighty per cent of the core protein consists of 10 repeats of a leucin-rich sequence of 24 amino acids. Similar repeats have been found in two other proteoglycans, biglycan and fibromodulin, and in several other proteins including Drosophila morphogenetic proteins. Expression of high levels of decorin in Chinese hamster ovary cells has a dramatic effect on their morphology and growth properties. We now report that this effect is due at least in part to the ability of decorin to bind transforming growth factor-beta, an autocrine factor that stimulates the growth of Chinese hamster ovary cells. As transforming growth factor-beta induces synthesis of decorin in many cell types, our results suggest that decorin may be a component of a feedback system regulating cell growth.