The extracellular matrix protein biglycan (Bgn) is a leucine-rich proteoglycan that is involved in the matrix assembly, cellular migration and adhesion, cell growth, and apoptosis. Although a distinct expression of Bgn was found in a number of human tumors, the role of this protein in the initiation and/or maintenance of neoplastic transformation has not been studied in detail. Using an in vitro model of oncogenic transformation, a down-regulation of Bgn expression as well as an altered secretion of different Bgn isoforms was found both in murine and human HER-2/neu oncogene-transformed cells when compared with HER-2/neu(-) cells. This was associated with a reduced growth, wound closure, and migration capacity. Vice versa, silencing of Bgn in HER-2/neu(-) fibroblasts increased the growth rate and migration capacity of these cells. Bgn expression was neither modulated in HER-2/neu(+) cells by transforming growth factor-β(1) nor by inhibition of the phosphoinositol 3-kinase and MAP kinase pathways. In contrast, inhibition of the protein kinase C (PKC) pathway led to the reconstitution of Bgn expression. In particular, the PKC target protein cAMP response element binding protein (CREB) is a major regulator of Bgn expression as the silencing of CREB by RNA interference was accompanied by ∼5000-fold increase in Bgn-mRNA expression in HER-2/neu(+) cells. Thus, Bgn inhibits the major properties of HER-2/neu-transformed cells, which is inversely modulated by the PKC signaling cascade.