To study interactions between TGF-beta and decorin, we experimentally induced femoral fracture in rats and immunohistologically examined changes in the distribution of TGF-beta and decorin in the femur 3, 7 and 14 days after fracture. In the areas where endochondral ossification occurred, decorin was detected during differentiation of mesenchymal cells into proliferating chondrocytes, while no TGB-beta was observed during same period. Once chondrocytes had hypertrophied, decorin was no longer observed, while the matrix around the hypertrophic chondrocytes was positively stained for TGB-beta. The disappearance of decorin, almost simultaneously accompanied by the appearance of the active type TGB-beta, suggests that decorin regulates the actions of TGB-beta.