Recent findings suggest that bone marrow-derived cells (BMDC) may contribute to tissue maintenance throughout the body. However, it is not yet known whether marrow-derived epithelial cells are capable of undergoing proliferation. Our laboratory has shown that BMDC engraft as keratinocytes in the skin at low levels (</= 1%) in the absence of injury. Here we show that skin damage affects the degree of engraftment of BMDC as keratinocytes and that the keratinocytes are actively cycling. Female mice reconstituted with sex-mismatched BM were wounded by punch biopsy and incision. At the wound site, engraftment of BMDC as epidermal cells increased within 1 day, and continued to increase to approximately 4% by 3 weeks after injury. Using a Cre-lox system, fusion of BMDC with epithelial cells was ruled out. BMDC-derived epithelial cells at the wound edges expressed Ki67, a marker for actively cycling cells, and this proliferation correlated with an increase in the number of donor-derived cells within the wound. Donor-derived cytokeratin 5-expressing cells were rare, suggesting that BMDC do not engraft as epidermal stem cells, and the level of engraftment peaked and then decreased over time, further suggesting that BMDC may assist in early wound healing by engrafting as transit-amplifying cells, which then differentiate into keratinocytes.