The small leucine rich proteoglycan decorin has been demonstrated to be a key regulator of collagen fibrillogenesis; decorin deficiencies lead to irregularly shaped collagen fibrils and weakened material behavior in postnatal murine connective tissues. In an in vitro investigation of the contributions of decorin to tissue organization and material behavior, model tissues were engineered by seeding embryonic fibroblasts, harvested from 12.5-13.5 gestational aged decorin null (Dcn-/-) or wild-type mice, within type I collagen gels. The resulting three-dimensional collagen matrices were cultured for 4 weeks under static tension. The collagen matrices seeded with Dcn-/- cells exhibited greater contraction, cell density, ultimate tensile strength, and elastic modulus than those seeded with wild-type cells. Ultrastructurally, the matrices seeded with Dcn-/- cells contained a greater density of collagen. The decorin-null tissues contained more biglycan than control tissues, suggesting that this related proteoglycan compensated for the absence of decorin. The effect of transforming growth factor-beta (TGF-b), which is normally sequestered by decorin, was also investigated in this study. The addition of TGF-b1 to the matrices seeded with wild-type cells improved their contraction and mechanical strength, whereas blocking TGF-b1 in the Dcn-/- cell-seeded matrices significantly reduced the collagen gel contraction. These results indicate that the inhibitory interaction between decorin and TGF-b1 significantly influenced the matrix organization and material behavior of these in vitro model tissues.