Homeostasis of the extracellular matrix (ECM) of tissues is regulated by controlling deposition and degradation of ECM proteins. The breakdown of ECM is essential in blastocyst implantation and embryonic development, tissue morphogenesis, menstrual shedding, bone formation, tissue resorption after delivery, and tumor growth and invasion. TGF- family members are one of the classes of proteins that actively participate in the homeostasis of ECM. Here, we report on the effect of lefty, a novel member of the TGF- family, on the homeostasis of extracellular matrix in a fibrosarcoma model. Fibroblastic cells forced to express lefty by retroviral transduction lost their ability to deposit collagen in vivo. This event was associated with downregulation of the steady-state level of connective tissue growth factor that induces collagen type I mRNA. In addition, lefty transduction significantly decreased collagen type I mRNA expression and simultaneously increased collagenolytic, gelatinolytic, elastolytic, and caseinolytic activities in vivo by the transduced fibroblasts. These findings provide a new insight on the actions of lefty and suggest that this cytokine plays an active role in remodeling of the extracellular matrix in vivo.Tissues have a supporting fibrovascular framework that undergoes constant remodeling. Generally, in normal tissues, a balance is reached between the formation and destruction of extracellular matrices (ECMs), 1 leading to a state of homeostasis. Acceleration of formation of ECM is a necessary event in some conditions, such as healing of wounds, repair of endometrium after menstruation, and embryonic development. In other physiologic conditions such as tissue breakdown in menstruating endometrium, endometrial tissue invasion by blastocyst, uterine tissue resorption after delivery, tissue morphogenesis, and bone resorption, the degradation of extracellular matrices supersedes the formation of stroma. On the other hand, uncontrolled destruction of ECM contributes to tumor invasion, and unabated deposition of ECM occurs in fibrotic conditions such as scleroderma, postsurgical adhesions, cirrhosis, glomerulosclerosis, idiopathic pulmonary fibrosis (Hamman-Rich syndrome), keloid, and post-burn scarring. For these reasons, there is a great interest in identifying the full complement of factors that contribute to the remodeling of ECM.The formation and breakdown of ECM requires precisely coordinated and controlled timely expression and activation of cytokines as well as ECM proteins and a host of enzymes that degrade diverse cellular and extracellular matrix proteins. Growth-regulatory cytokines of the transforming growth factor  (TGF-) family are one of the few classes of proteins that provide the necessary signals required in the homeostasis of a fibrovascular stroma (1-3). TGF- is a major profibrogenic cytokine that promotes the proliferation of fibroblasts, enhances CTGF and collagen type I mRNA expression, and suppresses the degradation of extracellular matrices by a dual action that involves...