This paper discusses decentralized parallel distributed compensator design for Takagi-Sugeno fuzzy systems. The fuzzy system is viewed as an interconnection of subsystems some of which are strongly connected, while others being weakly connected. The necessary theory is developed so that one can associate this fuzzy system with another one in a higher dimensional space, the so-called expanded space, design decentralized parallel distributed compensators in the expanded space, then contract the solution for implementation on the original fuzzy system. In this respect, connective stability of the open loop and closed loop of the interconnected system is analyzed via the concepts of vector Lyapunov functions and M-matrices. Different Lyapunov functions generate different results for the discrete-time fuzzy system, quadratic Lyapunov generating the superior of the two. Following a similar approach, stabilization of the closed-loop fuzzy system using local parallel distributed compensators is investigated.