Tissue transglutaminase (TG) is an enzyme that stabilizes the structure of tissues by covalently ligating extracellular matrix molecules. Expression and localization of TG are not well established during wound healing. We performed punch biopsy wounds on anesthetized rats and monitored the wound healing process by histological and immunohistochemical methods. The TG antigen and activity are expressed at sites of neovascularization in the provisional fibrin matrix within 24 h of wounding. Endothelial cells, macrophages, and skeletal muscle cells expressed TG throughout the healing process. The TG antigen within the wound was active in vivo based on the detection of isopeptide bonds. The TG antigen increased four- to fivefold by day 3 postwounding and was proteolytically degraded. TG expression occurred in association with TGF-beta, TNF-alpha, IL-6, and VEGF production in the wound. Recombinant TG increased vessel length density (a measure of angiogenesis) when applied topically in rat dorsal skin flap window chambers. We have established that TG is an important tissue stabilizing enzyme that is active during wound healing and can function to promote angiogenesis.