Transforming growth factor (TGF)-β is a key cytokine in the pathogenesis of pulmonary fibrosis, and pharmacological interference with TGF-β can ameliorate the fibrotic tissue response. The small proteoglycans decorin and biglycan are able to bind and inhibit TGF-β activity in vitro. Although decorin has anti-TGF-β properties in vivo, little is known about the physiological role of biglycan in vivo. Adenoviral gene transfer was used to overexpress active TGF-β, decorin, and biglycan in cell culture and in murine lungs. Both proteoglycans were able to interfere with TGF-β bioactivity in vitro in a dose-dependant manner. In vivo, overexpression of TGF-β resulted in marked lung fibrosis, which was significantly reduced by concomitant overexpression of decorin. Biglycan, however, had no significant effect on lung fibrosis induced by TGF-β. The data suggest that differences in tissue distribution are responsible for the different effects on TGF-β bioactivity in vivo, indicating that decorin, but not biglycan, has potential therapeutic value in fibrotic disorders of the lung.