Dry eye disease (DED) affects hundreds of millions of people worldwide. It is characterized by the production of inflammatory cytokines and chemokines as well as damaging matrix metalloproteinases (MMPs) at the ocular surface. While proteoglycan 4 (PRG4), a mucin-like glycoprotein present at the ocular surface, is most well known as a boundary lubricant that contributes to ocular surface integrity, it has been shown to blunt inflammation in various cell types, suggesting a dual mechanism of action. Recently, full-length recombinant human PRG4 (rhPRG4) has been shown to improve signs and symptoms of DED in humans. However, there remains a significant need for basic science research on rhPRG4's biological properties and its potential therapeutic mechanisms of action in treating DED. Therefore, the objectives of this study were to characterize endogenous PRG4 expression by telomerase-immortalized human corneal epithelial (hTCEpi) cells, examine whether exogenous rhPRG4 modulates cytokine and chemokine secretion in response to dry eye associated inflammation (TNFα and IL-1β), explore interactions between rhPRG4 and MMP-9, and understand how experimental dry eye (EDE) in mice affects PRG4 expression. PRG4 secretion from hTCEpi cells was quantified by Western blot and expression visualized by immunocytochemistry. Cytokine/chemokine production was measured by ELISA and Luminex, while rhPRG4's effect on MMP-9 activity, binding, and expression was quantified using an MMP-9 inhibitor kit, surface plasmon resonance, and reverse transcription polymerase chain reaction (RT-PCR), respectively. Finally, EDE was induced in mice, and PRG4 was visualized by immunohistochemistry in the cornea and by Western blot in lacrimal gland lysate. In vitro results demonstrate that hTCEpi cells synthesize and secrete PRG4, and PRG4 secretion is inhibited by TNFα and IL-1β. In response to these pro-inflammatory stresses, exogenous rhPRG4 significantly reduced the stimulated production of IP-10, RANTES, ENA-78, GROα, MIP-3α, and MIG, and trended towards a reduction of MIP-1α and MIP-1β. The hTCEpi cells were also able to internalize fluorescently-labelled rhPRG4, consistent with a mechanism of action that includes downstream biological signaling pathways. rhPRG4 was not digested by MMP-9, and it did not modulate MMP-9 gene expression in hTCEpi cells, but it was able to bind to MMP-9 and inhibited in vitro activity of exogenous MMP-9 in the presence of human tears. Finally, in vivo results demonstrate that EDE significantly decreased immunolocalization of PRG4 on the corneal epithelium and trended towards a reduction of PRG4 in lacrimal gland lysate. Collectively these results demonstrate rhPRG4 has anti-inflammatory properties on corneal epithelial cells, particularly as it relates to mitigating chemokine production, and is an inhibitor of MMP-9 activity, as well as that in vivo expression of PRG4 can be altered in preclinical models of DED. In conclusion, these findings contribute to our understanding of PRG4's immunomodulatory properties in the context of DED inflammation and provide the foundation and motivation for further mechanistic research of PRG4's properties on the ocular surface as well as expanding clinical evaluation of its ability as a multifunctional therapeutic agent to effectively provide relief to those who suffer from DED.