Decorin is a member of the expanding group of widely distributed small leucine-rich proteoglycans that are expected to play important functions in tissue assembly. We report that mice harboring a targeted disruption of the decorin gene are viable but have fragile skin with markedly reduced tensile strength. Ultrastructural analysis revealed abnormal collagen morphology in skin and tendon, with coarser and irregular fiber outlines. Quantitative scanning transmission EM of individual collagen fibrils showed abrupt increases and decreases in mass along their axes, thereby accounting for the irregular outlines and size variability observed in cross-sections. The data indicate uncontrolled lateral fusion of collagen fibrils in the decorindeficient mice and provide an explanation for the reduced tensile strength of the skin. These findings demonstrate a fundamental role for decorin in regulating collagen fiber formation in vivo.