The role of the latent TGF-beta binding protein (LTBP) is unclear. In cultures of fetal rat calvarial cells, which form mineralized bonelike nodules, both LTBP and the TGF-beta 1 precursor localized to large fibrillar structures in the extracellular matrix. The appearance of these fibrillar structures preceded the appearance of type I collagen fibers. Plasmin treatment abolished the fibrillar staining pattern for LTBP and released a complex containing both LTBP and TGF-beta. Antibodies and antisense oligonucleotides against LTBP inhibited the formation of mineralized bonelike nodules in long-term fetal rat calvarial cultures. Immunohistochemistry of fetal and adult rat bone confirmed a fibrillar staining pattern for LTBP in vivo. These findings, together with the known homology of LTBP to the fibrillin family of proteins, suggest a novel function for LTBP, in addition to its role in matrix storage of latent TGF-beta, as a structural matrix protein that may play a role in bone formation.