Emerging evidence indicates that fibrin clotting is regulated by different external factors. We demonstrated recently that decorin, a regulator of collagen fibrillogenesis and transforming growth factor-beta activity, binds to the D regions of fibrinogen (Dugan, T.A., Yang, V. W.-C., McQuillan, D.J., and Höök, M. (2003) J. Biol. Chem. 278, 13655-13662). We now report that the decorin-fibrinogen interaction alters the assembly, structure, and clearance of fibrin fibers. Relative to fibrinogen, substoichiometric amounts of decorin core protein modulated clotting, whereas an excess of an active decorin peptide was necessary for similar activity. These concentration-dependent effects suggest that decorin bound to the D regions sterically modulates fibrin assembly. Scanning electron microscopy images of fibrin clotted in the presence of increasing concentrations of decorin core protein showed progressively decreasing fiber diameter. The sequestration of Zn(2+) ions from the N-terminal fibrinogen-binding region abrogated decorin incorporation into the fibrin network. Compared with linear thicker fibrin fibers, the curving thin fibers formed with decorin underwent accelerated tissue-type plasminogen activator-dependent fibrinolysis. Collectively, these data demonstrate that decorin can regulate fibrin organization and reveal a novel mechanism by which extracellular matrix components can participate in hemostasis, thrombosis, and wound repair.