Transforming growth factor-beta1 (TGF-beta1) is thought to play a crucial role in fibrotic diseases. This study demonstrates for the first time that TGF-beta1 stimulation can induce myoblasts (C2C12 cells) to express TGF-beta1 in an autocrine manner, down-regulate the expression of myogenic proteins, and initiate the production of fibrosis-related proteins in vitro. Direct injection of human recombinant TGF-beta1 into skeletal muscle in vivo stimulated myogenic cells, including myofibers, to express TGF-beta1 and induced scar tissue formation within the injected area. We also observed the local expression of this growth factor by myogenic cells, including regenerating myofibers, in injured skeletal muscle. Finally, we demonstrated that TGF-beta1 gene-transfected myoblasts (CT cells) can differentiate into myofibroblastic cells after intramuscular transplantation, but that decorin, an anti-fibrosis agent, prevents this differentiation process by blocking TGF-beta1. In summary, these findings indicate that TGF-beta1 is a major stimulator that plays a significant role in both the initiation of fibrotic cascades in skeletal muscle and the induction of myogenic cells to differentiate into myofibroblastic cells in injured muscle.