Previous studies have shown that human colon carcinomas contain elevated amounts of chondroitin sulfate proteoglycan (CS-PG) and hyaluronic acid, and that the major site of synthesis of these products is the host mesenchyme surrounding the tumor. These findings have led to the proposal that the abnormal formation of the tumor stroma is modulated by the neoplastic cells. The experiments of this paper were designed to explore further this complex phenomenon in an in vitro system using co-cultures of phenotypically stable human colon smooth muscle (SMC) and carcinoma cells (WiDr). The results showed a 3–5-fold stimulation of CS-PG and hyaluronic acid biosynthesis in the co-cultures as compared to the values predicted from the individual cell type cultured separately. The increase in CS-PG was not due to changes in specific activity of the precursor pool, but was rather due to a net increase in synthesis, inasmuch as it was associated with neither a stimulation of cell proliferation nor with an inhibition of intracellular breakdown. These biochemical changes were corroborated by ultrastructural studies which showed a marked deposition of proteoglycan granules in the co-cultures. Several lines of evidence indicated that the SMC were responsible for the overproduction of CS-PG: (i) SMC synthesized primarily CS-PG when cultured alone, in contrast to the WiDr, which synthesized exclusively heparan sulfate proteoglycan; (ii) only the SMC in co-culture stained with an antibody raised against the amino terminal peptide of a CS-PG (PG-40), structurally and immunologically related to that synthesized by the SMC; (iii) the stimulation of CS-PG in SMC could be reproduced, though to a lesser extent, using medium conditioned by WiDr, whereas medium conditioned by SMC had no effects on WiDr. In conclusion this study has reproduced in vitro a tumor-associated matrix with a proteoglycan composition similar to that observed in vivo and provides further support to the concept that production of a proteoglycan-rich extracellular environment is regulated by specific tumor-host cell interactions.