Hepatocellular carcinoma represents one of the most-rapidly spreading cancers in the world. In the majority of cases, an inflammation-driven fibrosis or cirrhosis precedes the development of the tumor. During malignant transformation, the tumor microenvironment undergoes qualitative and quantitative changes that modulate the behavior of the malignant cells. A key constituent for the hepatic microenvironment is the small leucine-rich proteoglycan decorin, known to interfere with cellular events of tumorigenesis mainly by blocking various receptor tyrosine kinases (RTK) such as EGFR, Met, IGF-IR, PDGFR and VEGFR2. In this study, we characterized cell signaling events evoked by decorin deficiency in two experimental models of hepatocarcinogenesis using thioacetamide or diethyl nitrosamine as carcinogens. Genetic ablation of decorin led to enhanced tumor occurrence as compared to wild-type animals. These findings correlated with decreased levels of the cyclin-dependent kinase inhibitor p21(WAF1/CIP1) and a concurrent elevation in retinoblastoma protein phosphorylation via cyclin dependent kinase 4. Decreased steady state p21(Waf1/Cip1) levels correlated with enhanced expression of transcription factor AP4, a known transcriptional repressor of p21(Waf1/Cip1), and enhanced c-Myc protein levels. In addition, translocation of β-catenin was a typical event in diethyl nitrosamine-evoked tumors. In parallel, decreased phosphorylation of both c-Myc and β-catenin was observed in Dcn(-/-) livers likely due to the hindered GSK3β-mediated targeting of these proteins to proteasomal degradation. We discovered that in a genetic background lacking decorin, four RTKs were constitutively activated (phosphorylated), including three known targets of decorin such as PDGFRα, EGFR, IGF-IR, and a novel RTK MSPR/RON. Our findings provide powerful genetic evidence for a crucial in vivo role of decorin during hepatocarcinogenesis as lack of decorin in the liver and hepatic stroma facilitates experimental carcinogenesis by providing an environment devoid of this potent pan-RTK inhibitor. Thus, our results support future utilization of decorin as an antitumor agent in liver cancer.