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The proteoglycan decorin modulates leukocyte recruitment during delayed-type hypersensitivity responses. Decorin-deficient (Dcn(-/-)) mice show reduced edema formation during the first 24 h with a concurrent attenuated recruitment of CD8(+) leukocytes in the inflamed Dcn(-/-) ears. The aim of this study was to elucidate the molecular pathways affected by the loss of decorin. In vivo, reduced numbers of CD8(+) cells in Dcn(-/-) ears correlated with a reduced interferon-γ (Ifn-γ) and CXCL-10 expression. In vitro, Dcn(-/-) lymphocytes displayed an increased adhesion to brain microvascular (bEnd.3) endothelial cells. Decorin treatment of bEnd.3 increased Icam1 and down-regulated Vcam1 expression after TNF-α stimulation. However, Dcn(-/-) and wild-type lymphocytes produced IFN-γ after activation with CD3ε. Upon incubation with decorin, endothelial cells and fibroblasts responded differently to IFN-γ and TNF-α; CCL2 in bEnd.3 cells was more prominently up-regulated by TNF-α compared with IFN-γ. Notably, both factors were more potent in the presence of decorin. Compared with TNF-α, IFN-γ treatment induced significantly more CXCL-10, and both factors increased synthesis of CXCL-10 in the presence of decorin. The response to IFN-γ was similar in Dcn(-/-) and wild-type fibroblasts, an additional source of CXCL-10. However, addition of decorin yielded significantly more CXCL-10. Notably, decorin increased the stability of IFN-γ in vitro and potentiated IFN-γ-induced activation of STAT-1. Furthermore, only dermatan sulfate influenced IFN-γ signaling by significantly increasing CXCL-10 expression in contrast to decorin protein core alone. Our data demonstrate that decorin modulates delayed-type hypersensitivity responses by augmenting the induction of downstream effector cytokines of IFN-γ and TNF-α, thereby influencing the recruitment of CD8(+) lymphocytes into the inflamed tissue.