Basement membranes are composed of ordered arrays of characteristic extracellular matrix proteins, but little is known about the assembly of these structures in vivo. We have investigated the function of dystroglycan, a cell-surface laminin receptor expressed by cells contacting basement membranes in developing and adult tissues. We find that dystroglycan is required for the formation of a basement membrane in embryoid bodies. Our results further indicate that dystroglycanlaminin interactions are prerequisite for the deposition of other basement membrane proteins. Dystroglycan may exert its influence on basement membrane assembly by binding soluble laminin and organizing it on the cell surface. These data establish a role for dystroglycan in the assembly of basement membranes and suggest fundamental mechanisms underlying this process.