In diabetes-associated microangiopathies and atherosclerosis, there are alterations of the extracellular matrix (ECM) in the intima of small and large arteries. High levels of circulating nonesterified fatty acids (NEFAs) are present in insulin resistance and type 2 diabetes. High concentrations of NEFAs might alter the basement membrane composition of endothelial cells. In arteries, smooth muscle cells (SMCs) are the major producers of proteoglycans and glycoproteins in the intima, and this is the site of lipoprotein deposition and modification, key events in atherogenesis. We found that exposure of human arterial SMCs to 100-300 micromol/albumin-bound linoleic acid lowered their proliferation rate and altered cell morphology. SMCs expressed 2-10 times more mRNA for the core proteins of the proteoglycans versican, decorin, and syndecan 4 compared with control cells. There was no change in expression of fibronectin and perlecan. The decorin glycosaminoglycan chains increased in size after exposure to linoleic acid. The ECM produced by cells grown in the presence of linoleic acid bound 125I-labeled LDL more tightly than that of control cells. Darglitazone, a peroxisome proliferator-activated receptor (PPAR)-gamma ligand, neutralized the NEFA-mediated induction of the decorin gene. This suggests that some of the NEFA effects are mediated by PPAR-gamma. These actions of NEFAs, if present in vivo, could contribute to changes of the matrix of the arterial intima associated with micro- and macroangiopathies.