Inactivation of the perlecan gene leads to perinatal lethal chondrodysplasia. The similarity to the phenotypes of the Col2A1 knock-out and the disproportionate micromelia mutation suggests perlecan involvement in cartilage collagen matrix assembly. We now present a mechanism for the defect in collagen type II fibril assembly by perlecan-null chondrocytes. Cartilage perlecan is a heparin sulfate or a mixed heparan sulfate/chondroitin sulfate proteoglycan. The latter form binds collagen and accelerates fibril formation in vitro, with more defined fibril morphology and increased fibril diameters produced in the presence of perlecan. Interestingly, the enhancement of collagen fibril formation is independent on the core protein and is mimicked by chondroitin sulfate E but neither by chondroitin sulfate D nor dextran sulfate. Furthermore, perlecan chondroitin sulfate contains the 4,6-disulfated disaccharides typical for chondroitin sulfate E. Indeed, purified glycosaminoglycans from perlecan-enriched fractions of cartilage extracts contain elevated levels of 4,6-disulfated chondroitin sulfate disaccharides and enhance collagen fibril formation. The effect on collagen assembly is proportional to the content of the 4,6-disulfated disaccharide in the different cartilage extracts, with growth plate cartilage glycosaminoglycan being the most efficient enhancer. These findings demonstrate a role for perlecan chondroitin sulfate side chains in cartilage extracellular matrix assembly and provide an explanation for the perlecan-null chondrodysplasia.