Inflammatory breast cancer (IBC) is a clinically distinct and highly aggressive form of breast cancer with rapid onset and a strong propensity to metastasize. The molecular mechanisms underlying the aggressiveness and metastatic propensity of IBC are largely unknown. Herein, we report that decorin (DCN), a small leucine-rich extracellular matrix proteoglycan, is downregulated in tumors from patients with IBC. Overexpression of DCN in IBC cells markedly decreased migration, invasion, and cancer stem cells in vitro and inhibited tumor growth and metastasis in IBC xenograft mouse models. Mechanistically, DCN functioned as a suppressor of invasion and tumor growth in IBC by destabilizing E-cadherin and inhibiting EGFR/ERK signaling. DCN physically binds E-cadherin in IBC cells and accelerates its degradation through an autophagy-linked lysosomal pathway. We established that DCN inhibits tumorigenesis and metastasis in IBC cells by negatively regulating the E-cadherin/EGFR/ERK axis. Our findings offer a potential therapeutic strategy for IBC, and provide a novel mechanism for IBC pathobiology.