Matrix proteoglycans such as biglycan (Bgn) dominate skeletal tissue and yet its exact role in regulating bone function is still unclear. In this paper we describe the potential role of (Bgn) in the fracture healing process. We hypothesized that Bgn could regulate fracture healing because of previous work showing that it can affect normal bone formation. To test this hypothesis, we created fractures in femurs of 6-week-old male wild type (WT or Bgn+/0) and Bgn-deficient (Bgn-KO or Bgn-/0) mice using a custom-made standardized fracture device, and analyzed the process of healing over time. The formation of a callus around the fracture site was observed at both 7 and 14 days post-fracture in WT and Bgn-deficient mice and immunohistochemistry revealed that Bgn was highly expressed in the fracture callus of WT mice, localizing within woven bone and cartilage. Micro-computed tomography (μCT) analysis of the region surrounding the fracture line showed that the Bgn-deficient mice had a smaller callus than WT mice. Histology of the same region also showed the presence of less cartilage and woven bone in the Bgn-deficient mice compared to WT mice. Picrosirius red staining of the callus visualized under polarized light showed that there was less fibrillar collagen in the Bgn-deficient mice, a finding confirmed by immunohistochemistry using antibodies to type I collagen. Interestingly, real time RT-PCR of the callus at 7 days post-fracture showed a significant decrease in relative vascular endothelial growth factor A (VEGF) gene expression by Bgn-deficient mice as compared to WT. Moreover, VEGF was shown to bind directly to Bgn through a solid-phase binding assay. The inability of Bgn to directly enhance VEGF-induced signaling suggests that Bgn has a unique role in regulating vessel formation, potentially related to VEGF storage or stabilization in the matrix. Taken together, these results suggest that Bgn has a regulatory role in the process of bone formation during fracture healing, and further, that reduced angiogenesis could be the molecular basis.