Decorin is a member of the small leucine-rich proteoglycan gene family and plays an important role in suppressing cancer cell growth and metastasis. To elucidate the importance of decorin in intestinal carcinogenesis, a decorin-deficient ( Dcn ^−/− ) mouse model was employed. We found that targeted inactivation of decorin was sufficient to cause intestinal tumor formation with 30% of the Dcn ^−/− mice developing intestinal tumors with no other chemical or genetic initiation. Moreover, a high-risk diet amplified and accelerated the tumors initiated by decorin deficiency. Further, tumorigenesis in Dcn ^−/− mice was associated with disruption of intestinal maturation, including decreased cell differentiation and increased proliferation, which were linked to the downregulation of p21 ^WAF1/cip1 , p27 ^kip1 , intestinal trefoil factor and E-cadherin and to the upregulation of β-catenin signaling. In addition, we found that decorin was highly expressed in the differentiated area of human normal colonic mucosa, but was dramatically reduced in paired colorectal cancer tissues. Taken together, our data demonstrate that decorin acts as a tumor suppressor gene and plays an important role in the maintenance of cell maturation and therefore homeostasis in the intestinal tract.