Biglycan is a small leucine-rich proteoglycan which is localized in the extracellular matrix of bone and other specialized connective tissues. Both biglycan mRNA and protein are up-regulated by transforming growth factor-beta(1) (TGF-beta(1)) and biglycan appears to influence TGF-beta(1) activity. In this study, we have investigated the mechanism by which TGF-beta(1), TGF-beta(2) and TGF-beta(3) stimulate biglycan mRNA expression in the osteoblastic cell line MG-63. The cells were transfected with a series of deletional human biglycan promoter constructs and a region in the biglycan 5' DNA was found to respond to TGF-beta(1) with increased transcriptional activity in a dose-dependent manner. Also TGF-beta(2) and TGF-beta(3), two structurally highly related TGF-beta isoforms stimulated biglycan transcription. A TGF-beta responsive region was identified within the first 218 bp of the human biglycan promoter upstream from the transcriptional start site, which contained several binding sites for the transcription factor Sp1. Electrophoretic mobility shift assays with nuclear extracts from MG-63 cells showed binding of both Sp1 and Sp3 to a site at -216 to -208. When the biglycan promoter construct was co-transfected with Sp1 and Sp3 expression vectors in Sp1-deficient Drosophila Schneider-2 cells, Sp1 induced the transcriptional activity of biglycan. Addition of Sp3 augmented the effect of Sp1 on biglycan gene expression. Induction of biglycan mRNA expression in response to TGF-beta in MG-63 cells was abrogated by mithramycin, an inhibitor of Sp1 binding to GC-rich DNA sequences. A mutation in the Sp1 site at -216 to -208 within the -218 biglycan promoter construct substantially diminished the transcriptional up-regulation by TGF-beta(1). Taken together this data shows for the first time that TGF-beta(1) stimulation of human biglycan mRNA expression relies on increased transcription of the biglycan gene, and is mediated by members of the Sp1 family of transcription factors.