CCN1 is a matricellular protein that activates many genes related to wound healing and tissue remodeling in fibroblasts, but its effect on epithelial cells remains unclear. This study examined the role of CCN1 in epithelial wound healing using rat gastric epithelial cells and rat stomach ulcer as in vitro and in vivo models, respectively. We found that CCN1 expression is highly upregulated in the epithelial cells adjacent to a wound and remains high until the wound is healed. Upregulation of CCN1 activates a transient epithelial-mesenchymal transition in the epithelial cells at the migrating front and drives wound closure. Once the wound is healed, these epithelial cells and their progeny can resume their original epithelial phenotype. We also found that CCN1-induced E-cadherin loss is not due to transcriptional regulation but rather protein degradation due to the collapse of adherens junctions, which is contributed by beta-catenin translocation. CCN1-activated integrin-linked kinase mediates this process. Finally, our in vivo study showed that locally neutralizing CCN1 drastically impairs wound closure, whereas local injection of recombinant CCN1 protein induces expression of vimentin and smooth muscle alpha-actin in normal gastric mucosal epithelial cells and accelerates re-epithelialization during ulcer healing. In conclusion, our study indicates that CCN1 can induce reversible epithelial-mesenchymal transition, and this feature may have great value for clinical wound healing.