Biglycan (Bgn) is a member of the small leucine-rich proteoglycan (SLRP) family found in bone extracellular matrix (ECM), and hence involved in regulating bone formation and matrix mineralization. It has been reported that Bgn facilitates osteoblast differentiation, and extracellular signal-regulated kinase (Erk) and Smad are two important pathways in regulating osteoblast differentiation. However, the underlying mechanism for Bgn facilitating osteoblast differentiation has not been fully elucidated. The present study demonstrated that the matrix protein Bgn activates Erk signaling pathway and therefore increases Runx2 transcriptional activity, in which glycosaminoglycans (GAGs) chains play an essential role. Additionally, Bgn also activated Smad pathway, another signaling pathway related with osteoblast differentiation. The activation of these two signaling pathways induced by Bgn facilitated the mineralization deposition in vitro. These results demonstrated the mechanism of Bgn promoting osteoblast differentiation and matrix mineralization.