Decorin is a small leucine-rich extracellular matrix proteoglycan composed of a core protein with a single glycosaminoglycan (GAG) chain near the N-terminus and N-glycosylated at three potential sites. Decorin is involved in the regulation of formation and organization of collagen fibrils, modulation of the activity of growth factors such as transforming growth factor beta (TGF-beta), and exerts other effects on cell proliferation and behavior. Increasing evidences show that decorin plays an important role in fibrogenesis by regulating TGF-beta, a key stimulator of fibrosis, and by directly modulating the degradation of extracellular matrix (ECM) from activated hepatic stellate cells (HSCs). In this study, the core protein of human decorin was cloned and expressed in Escherichia coli. The purified recombinant human decorin (rhDecorin) significantly inhibited the proliferation of LX-2 cells, a human HSC cell line, stimulated by TGF-beta1. RT-PCR result showed that the expression of metalloproteinase-2 (MMP-2) and tissue inhibitor of metalloproteinase-1 (TIMP-1) were reduced by rhDecorin in LX-2 cells stimulated by TGF-beta1. Furthermore, the protein expression of smooth muscle-alpha-actin (alpha-SMA), collagen type III and phosphorylated Smad2 (p-Smad2) was significantly decreased in the presence of rhDecorin. rhDecorin also reduced fibrillogenesis of collagen type I in a dose-dependent manner. Gene expression profiles of LX-2 cells stimulated by TGF-beta1 in the presence and the absence of rhDecorin were obtained by using cDNA microarray technique and differentially expressed genes were identified to provide further insight into the molecular action mechanism of decorin on LX-2 cells.