Decorin inhibits the epidermal growth factor receptor (EGFR) by down-regulating its tyrosine kinase activity, thereby blocking the growth of a variety of transformed cells and tumor xenografts. In this study we provide evidence that decorin directly binds to the EGFR causing its dimerization, internalization, and ultimately its degradation. Using various pharmacological agents to disrupt clathrin-dependent and -independent endocytosis, we demonstrate that decorin evokes a protracted internalization of the EGFR primarily via caveolar-mediated endocytosis. In contrast to EGF, decorin targets the EGFR to caveolae, but not to early or recycling endosomes. Ultimately, however, both EGF-and decorin-induced pathways converge into late endosomes/lysosomes for final degradation. Thus, we have discovered a novel biological mechanism for decorin that could explain its anti-proliferative and anti-oncogenic mode of action.Decorin, the prototypic member of an expanding family of small leucine-rich proteoglycans (1), is implicated in modulating collagen fibrillogenesis (2, 3) and cell growth and survival (4 -8). The mechanism of decorin action has begun to be elucidated by the discovery that decorin interferes with epidermal growth factor receptor (EGFR) 3 signaling (9, 10). Decorin leads to a protracted down-regulation of EGFR tyrosine kinase (11) and other members of the ErbB family of receptor tyrosine kinase (12), and causes an attenuation of the EGFR-mediated mobilization of intracellular calcium (11). Decorin induces expression of the endogenous cyclin-dependent kinase inhibitor p21 WAF1 (13, 14) and a subsequent arrest of the cells in the G 1 phase of the cell cycle (15). These cytostatic effects occur in a wide variety of tumor cell lines (5, 14) and can also affect murine tumor cells (5) and normal human cells, such as endothelial cells (16) and macrophages (17). During quiescence, decorin expression is markedly up-regulated in most normal diploid cells, whereas its expression is nearly abolished in most transformed cells (2, 18 -20). For example, transformation induced by the activating transcription factor-3 and the nuclear v-Src and v-Jun oncoproteins cause a marked suppression of decorin gene expression (21-23). Lack of decorin expression is permissive for tumor development insofar as mice with a targeted ablation of both decorin and the tumor suppressor gene p53, develop lymphomas at accelerated rates as compared with the p53 null animals (24). Consistent with these findings, decorin expression is differentially down-regulated in hepatocellular (25), lung (26), and ovarian (27) carcinomas, and reduced expression of decorin is associated with a poor prognosis in invasive breast carcinoma (28). Finally, adenovirus-mediated gene transfer of decorin causes a significant growth inhibition of various tumors (6, 29), and its de novo expression prevents metastastic spreading in a breast carcinoma model (30).The similarity of the response to decorin in several human cell lines with a diverse histogenetic background and th...