Excessive accumulation of extracellular matrix (ECM) is a hallmark of tumor microenvironment and plays active roles during tumor progression. How this process is regulated and whether it is reversible for cancer treatment are outstanding questions. The adhesion G protein-coupled receptor GPR56 inhibits melanoma growth and binds to tissue transglutaminase (TG2), a major cross-linking enzyme in ECM. To understand the function of TG2 in GPR56-mediated melanoma inhibition, we performed xenograft studies in immunodeficient Tg2-/- mice. Our results revealed an antagonistic relationship between GPR56 and TG2 in melanoma: while TG2 and its crosslinking activity promote melanoma growth, GPR56 antagonizes this effect by internalizing and degrading it. The negative regulation of TG2 by GPR56 associates with the decreased deposition of a major ECM protein, fibronectin, and impaired accumulation of focal adhesion kinase, indicating that the GPR56-TG2 interaction regulates ECM deposition and cell-ECM adhesion. Taken together, our findings establish the roles of TG2 in GPR56-mediated melanoma inhibition. The uncovered antagonistic relationship between GPR56 and TG2 proposes a mechanism by which ECM accumulation/crosslinking in tumors may be reversed, and thus could have therapeutic potential for cancer control and treatment.