Decorin is a small, leucine-rich proteoglycan that binds to collagen and regulates fibrillogenesis. We hypothesized that decorin binding to collagen inhibits phagocytosis of collagen fibrils. To determine the effects of decorin on collagen degradation, we analyzed phagocytosis of collagen and collagen/decorin-coated fluorescent beads by Rat-2 and gingival fibroblasts. Collagen beads bound to gingival cells by ␣21 integrins. Binding and internalization of decorin/collagen-coated beads decreased dose-dependently with increasing decorin concentration (p < 0.001). Inhibition of binding was sustained over 5 h (p < 0.001) and was attributed to interactions between decorin and collagen and not to decorin-collagen receptor interactions. Both the nonglycosylated decorin core protein and the thermally denatured decorin significantly inhibited collagen bead binding (ϳ50 and 89%, respectively; p < 0.05). Mimetic peptides corresponding to leucine-rich repeats 1-3, encompassed by a collagen-binding ϳ11-kDa cyanogen bromide fragment of decorin and leucine-rich repeats 4 and 5, previously shown to bind to collagen, were tested for their ability to inhibit collagen bead binding. Although the synthetic peptide 3 alone exhibited saturable binding to collagen, neither peptides 3 nor 1 and 2 markedly inhibited phagocytosis. Leucine-rich repeat 3 bound to a triple helical peptide containing the ␣2 integrin-binding site of collagen. When collagen beads were co-incubated with peptides 3 and 4, inhibition of collagen phagocytosis (55%) was equivalent to intact native/ recombinant core protein. Thus a novel collagen binding domain in decorin acts cooperatively with leucinerich repeat 4 to mask the ␣21 integrin-binding site on collagen, an important sequence for the phagocytosis of collagen fibrils.The intracellular phagocytic pathway in fibroblasts contributes to the physiological remodeling of collagen by lysosomal degradation of internalized collagen fibrils (1-4), but the mechanisms that regulate this pathway in vivo are poorly characterized. Previous morphological studies have shown that collagen fibrils are "decorated" by proteoglycans (5); consequently, decorin may affect the binding step of collagen phagocytosis (6).Decorin (DCN) 1 is a matrix proteoglycan that belongs to the small leucine-rich proteoglycan family (7). The mature form of DCN (ϳ100 kDa) consists of an ϳ45-kDa core protein, a single dermatan or chondroitin sulfate glycosaminoglycan chain, cysteine loops near the N and C terminus, and either two or three asparagine-bound oligosaccharides. The central part of the core protein consists of 10 leucine-rich repeat (LRR) sequences in tandem array (8). Rotary shadowing-electron microscopy and molecular modeling studies suggest that the DCN core protein is horseshoe-shaped (9, 10) and that the inner concavity accommodates and may provide a binding site for type I collagen (10). Indeed, DCN binds not only to type I but also to collagen types II, III, VI,. DCN binding to collagen molecules is thought to influence collagen fi...