Fibronectin (FN) deposition mediated by fibroblasts is an important process in matrix remodeling and wound healing. By monitoring the deposition of soluble biotinylated FN, we show that the stress-induced TG-FN matrix, a matrix complex of tissue transglutaminase (TG2) with its high affinity binding partner FN, can increase both exogenous and cellular FN deposition and also restore it when cell adhesion is interrupted via the presence of RGD-containing peptides. This mechanism does not require the transamidase activity of TG2 but is activated through an RGD-independent adhesion process requiring a heterocomplex of TG2 and FN and is mediated by a syndecan-4 and β1 integrin co-signaling pathway. By using α5 null cells, β1 integrin functional blocking antibody, and a α5β1 integrin targeting peptide A5-1, we demonstrate that the α5 and β1 integrins are essential for TG-FN to compensate RGD-induced loss of cell adhesion and FN deposition. The importance of syndecan-2 in this process was shown using targeting siRNAs, which abolished the compensation effect of TG-FN on the RGD-induced loss of cell adhesion, resulting in disruption of actin skeleton formation and FN deposition. Unlike syndecan-4, syndecan-2 does not interact directly with TG2 but acts as a downstream effector in regulating actin cytoskeleton organization through the ROCK pathway. We demonstrate that PKCα is likely to be the important link between syndecan-4 and syndecan-2 signaling and that TG2 is the functional component of the TG-FN heterocomplex in mediating cell adhesion via its direct interaction with heparan sulfate chains.