The mechanisms linking immune responses and inflammation with tumor development are not well understood. Here, we show that the soluble form of the extracellular matrix proteoglycan decorin controls inflammation and tumor growth through PDCD4 (programmed cell death 4) and miR-21 (microRNA-21) by two mechanisms. First, decorin acted as an endogenous ligand of Toll-like receptors 2 and 4 and stimulated production of proinflammatory molecules, including PDCD4, in macrophages. Second, decorin prevented translational repression of PDCD4 by decreasing the activity of transforming growth factor–β1 and the abundance of oncogenic miR-21, a translational inhibitor of PDCD4. Moreover, increased PDCD4 abundance led to decreased release of the anti-inflammatory cytokine interleukin-10, thereby making the cytokine profile more proinflammatory. This pathway operates in both pathogen-mediated and sterile inflammation, as shown here for sepsis and growth retardation of established tumor xenografts, respectively. Decorin was an early response gene evoked by septic inflammation, and protein concentrations of decorin were increased in the plasma of septic patients and mice. In cancer, decorin reduced the abundance of anti-inflammatory molecules and increased that of proinflammatory molecules, thereby shifting the immune response to a proinflammatory state associated with reduced tumor growth. Thus, by stimulating proinflammatory PDCD4 and decreasing the abundance of miR-21, decorin signaling boosts inflammatory activity in sepsis and suppresses tumor growth.