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Transplantation of islets of Langerhans is a promising alternative treatment strategy in severe cases of type 1 diabetes mellitus; however, the success rate is limited by the survival rate of the cells post-transplantation. Restoration of the native pancreatic niche during transplantation potentially can help to improve cell viability and function. Here, we assessed for the first time the regulatory role of the small leucine-rich proteoglycan decorin (DCN) in insulin secretion in human β-cells, and its impact on pancreatic extracellular matrix (ECM) protein expression in vitro. In depth analyses utilizing next-generation sequencing as well as Raman microspectroscopy and Raman imaging identified pathways related to glucose metabolism to be upregulated in DCN-treated cells, including oxidative phosphorylation within the mitochondria as well as proteins and lipids of the endoplasmic reticulum. We further showed the effectiveness of DCN in a transplantation setting by treating collagen type 1-encapsulated β-cell-containing pseudo-islets with DCN. Taken together, in this study, we demonstrate the potential of DCN to improve the function of insulin-secreting β-cells while reducing the expression of ECM proteins affiliated with fibrotic capsule formation, making DCN a highly promising therapeutic agent for islet transplantation., Competing Interests: Declaration of Competing Interests The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper., (Copyright © 2022 The Author(s). Published by Elsevier B.V. All rights reserved.)