Biglycan, a small leucine-rich proteoglycan, is a ubiquitous ECM component; however, its biological role has not been elucidated in detail. Here we show that biglycan acts in macrophages as an endogenous ligand of TLR4 and TLR2, which mediate innate immunity, leading to rapid activation of p38, ERK, and NF-κB and thereby stimulating the expression of TNF-α and macrophage inflammatory protein–2 (MIP-2). In agreement, the stimulatory effects of biglycan are significantly reduced in TLR4-mutant (TLR4-M), TLR2^–/–, and myeloid differentiation factor 88^–/– (MyD88^–/–) macrophages and completely abolished in TLR2^–/–/TLR4-M macrophages. Biglycan-null mice have a considerable survival benefit in LPS- or zymosan-induced sepsis due to lower levels of circulating TNF-α and reduced infiltration of mononuclear cells in the lung, which cause less end-organ damage. Importantly, when stimulated by LPS-induced proinflammatory factors, macrophages themselves are able to synthesize biglycan. Thus, biglycan, upon release from the ECM or from macrophages, can boost inflammation by signaling through TLR4 and TLR2, thereby enhancing the synthesis of TNF-α and MIP-2. Our results provide evidence for what is, to our knowledge, a novel role of the matrix component biglycan as a signaling molecule and a crucial proinflammatory factor. These findings are potentially relevant for the development of new strategies in the treatment of sepsis.