The pleiotropic growth factor TGFbeta plays an important role in regulating responses to skin injury. TGFbeta targets many different cell types and is involved in all aspects of wound healing entailing inflammation, re-epithelialization, matrix formation and remodeling. To elucidate the role of TGFbeta signal transduction in keratinocytes during cutaneous wound healing, we have used transgenic mice expressing a dominant negative type II TGFbeta receptor exclusively in keratinocytes. We could demonstrate that this loss of TGFbeta signaling in keratinocytes led to an accelerated re-epithelialization of full thickness excisional wounds accompanied by an increased proliferation in keratinocytes at the wound edge. Furthermore, we show that impaired TGFbeta signaling in keratinocytes reduces apoptosis in re-epithelialized wounds of transgenic animals. A cDNA array identified the transcription factor early growth response factor 1 (Egr1) as a target gene for TGFbeta in late phases of the wound healing process. As a member of the immediate-early gene family, Egr1 is upregulated shortly after injury and induces the expression of growth factor genes. We could demonstrate that Egr1 expression is also upregulated in skin wounds which have already undergone re-epithelialization. In conclusion, we attribute the enhanced re-epithelialization in our transgenics to the resistance of keratinocytes to TGFbeta-mediated growth restriction and apoptosis induction. We also propose a new role for TGFbeta induced Egr1 in late phase wound repair.