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Biglycan and decorin are two closely related proteoglycans whose protein cores contain leucine-rich repeats flanked by disulfides. We have previously shown that decorin is dimeric both in solution and in crystal structures. In this study we determined whether biglycan dimerizes and investigated the role of dimerization in the folding and stability of these proteoglycans. We used light scattering to show that biglycan is dimeric in solution and solved the crystal structure of the glycoprotein core of biglycan at 3.40-angstroms resolution. This structure reveals that biglycan dimerizes in the same way as decorin, i.e. by apposition of the concave inner surfaces of the leucine-rich repeat domains. We demonstrate that low concentrations of guanidinium chloride denature biglycan and decorin but that the denaturation is completely reversible following removal of the guanidinium chloride, as assessed by circular dichroism spectroscopy. Furthermore, the rate of refolding is dependent on protein concentration, demonstrating that it is not a unimolecular process. Upon heating, decorin shows a single structural transition at a T(m) of 45-46 degrees C but refolds completely upon cooling to 25 degrees C. This property of decorin enabled us to show both by calorimetry and light scattering that dimer to monomer transition coincided with unfolding and monomer to dimer transition coincided with refolding; thus these processes are inextricably linked. We further conclude that folded monomeric biglycan or decorin cannot exist in solution. This implies novel interrelated functions for the parallel beta sheet faces of these leucine-rich repeat proteoglycans, including dimerization and stabilization of protein folding.