Microfibril-associated glycoprotein-1 (MAGP-1) is a component of vertebrate extracellular matrix (ECM) microfibrils that, together with the fibrillins, contributes to microfibril function. Many of the phenotypes associated with MAGP-1 gene inactivation are consistent with dysregulation of the transforming growth factor β (TGFβ)/bone morphogenetic protein (BMP) signaling system. We have previously shown that full-length MAGP-1 binds active TGFβ-1 and some BMPs. The work presented here further defines the growth factor-binding domain of MAGP-1. Using recombinant domains and synthetic peptides, along with surface plasmon resonance analysis to measure the kinetics of the MAGP-1-TGFβ-1 interaction, we localized the TGFβ- and BMP-binding site in MAGP-1 to a 19-amino acid-long, highly acidic sequence near the N terminus. This domain was specific for binding active, but not latent, TGFβ-1. Growth factor activity experiments revealed that TGFβ-1 retains signaling activity when complexed with MAGP-1. Furthermore, when bound to fibrillin, MAGP-1 retained the ability to interact with TGFβ-1, and active TGFβ-1 did not bind fibrillin in the absence of MAGP-1. The absence of MAGP was sufficient to raise the amount of total TGFβ stored in the ECM of cultured cells, suggesting that the MAGPs compete with the TGFβ large latent complex for binding to microfibrils. Together, these results indicate that MAGP-1 plays an active role in TGFβ signaling in the ECM.