The Mov-13 strain of mice was created by the insertion of the murine Moloney leukemia virus into the first intron of the alpha 1 (I) collagen gene. Consequently, Mov-13 embryos do not transcribe alpha 1 (I) collagen mRNA and lack type I collagen protein in the extracellular matrix (ECM). Homozygotes die within 12-14 days of embryonic development, in part from the rupture of large blood vessels, and also exhibit deficiencies in hematopoesis and assembly of the ECM (Lohler et al.  Cell 38:597-607). Several matricellular proteins, proteoglycans, and growth factors bind to type I collagen, e.g., fibronectin, secreted protein acidic and rich in cysteine (SPARC), decorin, and transforming growth factor-beta. Here we investigate the expression and function of SPARC in the absence of type I collagen. We show that fibroblasts isolated from Mov-13 homozygous, heterozygous, and wild-type embryos transcribed and translated SPARC mRNA in vitro. However, accumulation of extracellular SPARC was severely affected in the tissues of Mov-13 homozygotes, whereas extracellular deposition of the secreted glycoproteins fibronectin and type III collagen was not altered. Since SPARC has been shown to be a regulator of cell shape, the functional consequences of the absence of extracellular SPARC were evaluated in collagen gel contraction assays. Fibroblasts isolated from homozygous Mov-13 mice did not contract native type I collagen gels as efficiently as fibroblasts from heterozygous littermates; however, addition of exogenous SPARC enhanced the contraction of collagen by homozygous Mov-13 fibroblasts. The stimulatory effect of SPARC was blocked by antibodies specific for the amino terminus of the protein. These results provide evidence that type I collagen is one of the major extracellular proteins that binds SPARC in vivo. Furthermore, the capacity of fibroblasts to contract ECM in vitro is enhanced by extracellular SPARC. We therefore propose that the remodeling of ECM by cells in vivo is regulated in part by a specific interaction between SPARC and type I collagen.