Decorin is a small proteoglycan, composed of 12 leucine-rich repeats (LRRs) that modulates the activity of transforming growth factor type β (TGF-β) and other growth factors, and thereby influences proliferation and differentiation in a wide array of physiological and pathological processes, such as fibrosis, in several tissues and organs. Previously we described two novel modulators of the TGF-β-dependent signaling pathway: LDL receptor-related protein (LRP-1) and decorin. Here we have determined the regions in decorin that are responsible for interaction with LRP-1 and are involved in TGF-β-dependent binding and signaling. Specifically, we used decorin deletion mutants, as well as peptides derived from internal LRR regions, to determine the LRRs responsible for these decorin functions. Our results indicate that LRR6 and LRR5 participate in the interaction with LRP-1 and TGF-β as well as in its dependent signaling. Furthermore, the internal region (LRR6i), composed of 11 amino acids, is responsible for decorin binding to LRP-1 and subsequent TGF-β-dependent signaling. Furthermore, using an in vivo approach, we also demonstrate that the LRR6 region of decorin can inhibit TGF-β mediated action in response to skeletal muscle injury.