Protein phosphatase magnesium dependent 1A (PPM1A) has been implicated in fibrosis and skin wounding. We generated PPM1A knockout mice to study the role of PPM1A in the wound healing-inflammation-angiogenesis cross talk. The role of PPM1A in these processes was studied using the ocular alkali burn model system. In the injured cornea the absence of PPM1A led to enhanced inflammatory response, stromal keratocyte transactivation, fibrosis, increased p38 mitogen-activated protein kinase phosphorylation, elevated expression of transforming growth factor-β-related genes (including Acta2, TGF-β, Col1, MMP9, and VEGF) and subsequently to neovascularization. Augmented angiogenesis in the absence of PPM1A is a general process occurring in vivo in PPM1A knockout mice upon subcutaneous Matrigel injection and ex vivo in aortic ring Matrigel cultures. Using primary keratocyte cultures and various experimental approaches, we found that phospho-p38 is a favored PPM1A substrate and that by its dephosphorylation PPM1A participates in the regulation of the transforming growth factor-β signaling cascade, the hallmark of inflammation and the angiogenic process. On the whole, the studies presented here position PPM1A as a new player in the wound healing-inflammation-angiogenesis axis in mouse, reveal its crucial role in homeostasis on injury, and highlight its potential as a therapeutic mediator in pathologic conditions, such as inflammation and angiogenesis disorders, including cancer.