Proteoglycans are glycosylated proteins which have covalently attached highly anionic glycosaminoglycans. Many forms of proteoglycans are present in virtually all extracellular matrices of connective tissues. The major biological function of proteoglycans derives from the physicochemical characteristics of the glycosaminoglycan component of the molecule, which provides hydration and swelling pressure to the tissue enabling it to withstand compressional forces. This function is best illustrated by the most abundant proteoglycan in cartilage tissues, aggrecan. During the past decade, diverse species of proteoglycans have been identified in many connective tissues, on cell surfaces and in intracellular compartments. These proteoglycans have distinct biological functions apart from their hydrodynamic functions, and their involvement in many aspects of cell and tissue activities has been demonstrated. For example, decorin, which is widely distributed in many connective tissues, may have functions in regulating collagen fibril formation and in modifying the activity of transforming growth factor-beta; perlecan, the major heparan sulfate proteoglycan in the glomerular basement membrane, may play an important role as the major anionic site responsible for the charge selectivity in glomerular filtration. Specific interactions between proteoglycans (through both their glycosaminoglycan and core protein components) and macromolecules in the extracellular matrix are the key factors in the functions of proteoglycans. Exciting biological functions of proteoglycans are now gradually emerging.