Extracellular microenvironments have crucial roles in modulating cell interactions during development. Here we discover that a conserved protein modification (O-glycosylation) influences extracellular matrix composition during mammalian organogenesis, affecting integrin signalling and fibroblast growth factor-mediated cell proliferation. Specifically, mice deficient for an enzyme (Galnt1) that adds sugars to proteins during early stages of organogenesis resulted in intracellular accumulation of major basement membrane proteins and endoplasmic reticulum stress, with resultant effects on fibroblast growth factor signalling, epithelial cell proliferation and organ growth. Exogenous addition of basement membrane components rescued fibroblast growth factor signalling and the growth defects in a β1-integrin-dependent manner. Our work demonstrates for the first time that O-glycosylation influences the composition of the extracellular matrix during mammalian organ development, influencing specific aspects of the endoplasmic reticulum stress response, cell signalling, cell proliferation and organ growth. Our work provides insight into the role of this conserved protein modification in both development and disease.