Fibromodulin (FMOD) is an archetypal member of the class II small leucine-rich proteoglycan family. By directly binding to extracellular matrix structural components, such as collagen and lysyl oxidase, FMOD regulates collagen cross-linking, packing, assembly, and fibril architecture via a multivalent interaction. Meanwhile, as a pluripotent molecule, FMOD acts as a ligand of various cytokines and growth factors, especially those belonging to the transforming growth factor (TGF) β superfamily, by interacting with the corresponding signaling molecules involved in cell adhesion, spreading, proliferation, migration, invasion, differentiation, and metastasis. Consequently, FMOD exhibits promigratory, proangiogenic, anti-inflammatory, and antifibrogenic properties and plays essential roles in cell fate determination and maturation, progenitor cell recruitment, and tissue regeneration. The multifunctional nature of FMOD thus enables it to be a promising therapeutic agent for a broad repertoire of diseases, including but not limited to arthritis, temporomandibular joint disorders, caries, and fibrotic diseases among different organs, as well as to be a regenerative medicine candidate for skin, muscle, and tendon injuries. Moreover, FMOD is also considered a marker for tumor diagnosis and prognosis prediction and a potential target for cancer treatment. Furthermore, FMOD itself is sufficient to reprogram somatic cells into a multipotent state, creating a safe and efficient cell source for various tissue reconstructions and thus opening a new avenue for regenerative medicine. This review focuses on the recent preclinical efforts bringing FMOD research and therapies to the forefront. In addition, a contemporary understanding of the mechanism underlying FMOD’s function, particularly its interaction with TGFβ superfamily members, is also discussed at the molecular level to aid the discovery of novel FMOD-based treatments.