Diastrophic dysplasia sulfate transporter (DTDST) is a sulfate/chloride antiporter whose function is impaired in several human chondrodysplasias. We show that DTDST is upregulated by dexamethasone stimulation of HT1080 fibrosarcoma cells and is required for fibronectin (FN) extracellular matrix deposition by these cells. DTDST imports sulfate for the modification of glycosaminoglycans. We find that N-sulfation of these chains is important for FN matrix assembly and that sulfation of cell surface proteoglycans is reduced in the absence of DTDST. Of the candidate HT1080 cell surface proteoglycans, only loss of syndecan-2 compromises FN assembly, as shown by syndecan-2 small interfering RNA knockdown. DTDST is both necessary and sufficient to induce FN matrix assembly in HT1080 cells. Knockdown of DTDST ablates FN matrix, whereas its overexpression increases assembly without dexamethasone stimulation. These results identify a previously unrecognized regulatory pathway for matrix assembly via modulation of a sulfate transporter and proteoglycan sulfation. These data raise the possibility that FN assembly defects contribute to chondrodysplasias.