Decorin (DCN) is a ubiquitous proteoglycan comprised of a core protein attached to a single dermatan/chondroitin sulphate glycosaminoglycan chain. It may play a role in regulation of collagen fibrillogenesis and function as a reservoir of transforming growth factor beta (TGF-beta) in the extracellular milieu. We have examined the susceptibility of DCN to five different matrix metalloproteinases (MMPs): MMP-1 (tissue collagenase), MMP-2 (gelatinase A), MMP-3 (stromelysin 1), MMP-7 (matrilysin) and MMP-9 (gelatinase B). MMP-2 and MMP-3 digest DCN into seven major fragments in a similar pattern. The N-terminal sequence of the two fragments generated by MMP-2 and MMP-3 is Leu211-Lys-Gly-Leu-Asn, but that of the others is Asp1-Glu-Ala-Ser-Gly. MMP-7 cleaves DCN into three major fragments which have the N-termini Asp1-Glu-Ala-Ser-Gly, Glu2-Ala-Ser-Gly-Ile and Leu244-His-Leu-Asp-Asn. Activities of MMP-1 and MMP-9 against DCN are negligible. The values of Km for the MMPs capable of degrading DCN are very similar (10-12 microM), but the kcat/Km value for MMP-7 (30.5 microM-1.h-1) is 4.5-fold higher than those for MMP-2 and MMP-3. Incubation of a DCN-TGF-beta1 complex with MMP-2, -3 or -7 results in release of TGF-beta1 from the complex. These data indicate proteolytic degradation of DCN by MMP-2, MMP-3 and MMP-7, and suggest the possibility that, under pathophysiological conditions, the digestion by the MMPs may induce tissue reactions mediated by TGF-beta1 released from DCN in the connective tissues.