The small proteoglycan decorin is known to interact with type I collagen fibrils, thereby influencing the kinetics of fibril formation and the distance between adjacent collagen fibrils. The structurally related proteoglycan biglycan has been proposed not to bind to fibrillar collagens. However, when osteosarcoma cells were cultured on reconstituted type I collagen fibrils, both decorin and biglycan were retained by the matrix. Immunogold labeling at the electron microscopic level showed that both proteoglycans were distributed along collagen fibrils not only in osteosarcoma cell-populated collagen lattices but also in human skin. Reconstituted type I collagen fibrils were able to bind in vitro native and N-glycan-free biglycan as well as recombinant biglycan core protein. From Scatchard plots dissociation, constants were obtained that were higher for glycanated biglycan (8.7 x 10(-8) mol/liter) than for glycanated decorin (7 x 10(-10) mol/liter and 3 x 10(-9) mol/liter, respectively). A similar number of binding sites for either proteoglycan was calculated. Recombinant biglycan and decorin were characterized by lower dissociation constants compared with the glycanated forms. Glycanated as well as recombinant decorin competed with glycanated biglycan for collagen binding, suggesting that identical or adjacent binding sites on the fibril are used by both proteoglycans. These data suggest that, because of its trivalency, biglycan could have a special organizing function on the assembly of the extracellular matrix.