Autosomal-dominant congenital stromal corneal dystrophy (CSCD) is a human genetic disease characterized by corneal opacities beginning shortly after birth. It is linked to a frameshift mutation in decorin, resulting in a C-terminal truncation lacking 33 amino acids that includes the "ear" repeat, a feature specific for small leucine-rich proteoglycans. Our goals are to elucidate the roles of the mutant decorin in CSCD pathophysiology and to decipher the mechanism whereby mutant decorin affects matrix assembly. A novel animal model that recapitulates human CSCD was generated. This transgenic mouse model targets expression of truncated decorin to keratocytes, thereby mimicking the human frameshift mutation. Mutant mice expressed both wild-type and mutant decorin. Corneal opacities were found throughout, with increased severity toward the posterior stroma. The architecture of the lamellae was disrupted with relatively normal lamellae separated by regions of abnormal fibril organization. Within abnormal zones, the interfibrillar spacing and the fibril diameters were increased. Truncated decorin negatively affected the expression of endogenous decorin, biglycan, lumican, and keratocan and positively affected fibromodulin. Our results provide a mechanistic explanation for the generation of corneal opacities in CSCD.Thus, truncated decorin acts in a dominant-negative manner to interfere dually with matrix assembly and binding to receptor tyrosine kinases, thereby causing abnormal expression of endogenous small leucinerich proteoglycans leading to structural abnormalities within the cornea and vision loss.