Background & Aims: Biglycan (PG-1), a component of the extracellular matrix (ECM), is overexpressed in pancreatic cancer. To determine possible matrix-tumor interactions, we investigated the effects of PG-1 on pancreatic cancer. Methods: PG-1 expression in cell lines and tissue samples was examined by Northern blot and immunofluorescence. The effect of PG-1 on proliferation was determined by measuring activity of Ras, ERK, Rb, [H-3]thymidine incorporation, and cell cycle analysis. Expression of cyclin A, B1, D1, E1, G1, PCNA, p21, and p27 was analyzed by Northern and Western blots. Results: PG-1 was overexpressed in the ECM of pancreatic cancer samples compared with normal pancreas or chronic pancreatitis tissues. Addition of transforming growth factor (TGF)-beta induced PG-1 expression in HFL and HFFF2 fibroblasts as well as in the pancreatic cancer cell line PANC-1. PG-1 inhibited growth of both TGF-beta -responsive and TGF-beta- unresponsive pancreatic cancer cells by inducing GI-arrest, which is accompanied by an increase of p27 and reduction of cyclin A and proliferating cell nuclear antigen. Furthermore, endogenous Ras and ERK activation was partly reduced by PG-1 in vitro. Conclusions: The ECM protein PG-1 inhibits growth by arresting pancreatic cancer cells in G1 and may be part of a host defense mechanism aimed at slowing down pancreatic tumor progression.