The matricellular angiogenesis inhibitor, thrombospondin (TSP) 2, has been shown to be an important modulator of wound healing and the foreign body response. Specifically, TSP2-null mice display improved healing with minimal scarring and form well-vascularized foreign body capsules. In this study we performed subcutaneous implantation of sponges and investigated the resulting angiogenic and fibrogenic responses. Histological and immunohistochemical analysis of sponges, excised at 7, 14, and 21 days after implantation, revealed significant differences between TSP2-null and wild-type mice. Most notably, TSP2-null mice exhibited increased angiogenesis and fibrotic encapsulation of the sponge. However, invasion of dense tissue was compromised, even though its overall density was increased. Furthermore, histomorphometry and biochemical assays demonstrated a significant increase in the extracellular distribution of matrix metalloproteinase (MMP) 2, but no change in the levels of active transforming growth factor-β₁. The alterations in neovascularization, dense tissue invasion, and MMP2 in TSP2-null mice coincided with the deposition of TSP2 in the extracellular matrix of wild-type animals. These observations support the proposed role of TSP2 as a modulator of angiogenesis and matrix remodeling during tissue repair. In addition, they provide in vivo evidence for a newly proposed function of TSP2 as a modulator of extracellular MMP2 levels.