Asporin (ASPN) is a small leucine-rich proteoglycan that is involved in pathological processes of osteoarthritis (OA). Previously we showed that asporin can inhibit transforming growth factor-1 (TGF-1) mediated expression of cartilage matrix genes and chondrogenesis in vitro. However, details about regulation of asporin itself are not yet known. Here we examine ASPN expression in skeletal tissue and potential regulation of ASPN by TGF-. In situ hybridization revealed ASPN mRNA in the perichondrium/periosteum of the long bones, but absent from articular cartilage or growth plates. Immunohistochemical analysis also showed ASPN protein expression predominantly in the perichondrium/periosteum. TGF-1 induced endogenous ASPN mRNA expression over time in vitro, and this induction was suppressed by the TGF- type I receptor kinase inhibitor SB431542. Inhibition of Smad3 significantly reduced TGF-1-induced ASPN expression, while Smad3 overexpression augmented the induction. Characterization of the human ASPN promoter region revealed a region from -126 to -82 that is sufficient for full promoter activity; however, TGF-1 failed to increase activity through the ASPN promoter. Our findings indicate that TGF-1 induces ASPN through Smad3 but that this induction is indirect.