The generation of animals lacking SMAD proteins, which transduce signals from transforming growth factor-β (TGF-β), has made it possible to explore the contribution of the SMAD proteins to TGF-β activity in vivo. Here we report that, in contrast to predictions made on the basis of the ability of exogenous TGF-β to improve wound healing, Smad3-null (Smad3 ex8/ex8) mice paradoxically show accelerated cutaneous wound healing compared with wild-type mice, characterized by an increased rate of re-epithelialization and significantly reduced local infiltration of monocytes. Smad3 ex8/ex8 keratinocytes show altered patterns of growth and migration, and Smad3 ex8/ex8 monocytes exhibit a selectively blunted chemotactic response to TGF-β. These data are, to our knowledge, the first to implicate Smad3 in specific pathways of tissue repair and in the modulation of keratinocyte and monocyte function in vivo.