Objective: To overexpress TGF-β1 in human fibroblasts and characterize its role in excessive scar formation. Summary Background Data: TGF-β1 upregulation has been implicated in the formation of hypertrophic scars and keloids, but it is unclear if TGF-β1 upregulation is the cause or an effect of excessive scar formation. Methods: Normal human dermal fibroblasts were genetically modified to overexpress TGF-β1 as either the wild type latent molecule or as a mutant active molecule. The release of bioactive forms of TGF-β1 was measured, as were the effects of TGF-β1 upregulation on cell proliferation, expression of SMC α-actin and the ability of genetically modified fibroblasts to contract collagen lattices. Fibroblasts were implanted intradermally into athymic mice and tissue formation by these cells was analyzed at various time points by histology and immunostaining. Results: Gene-modified fibroblasts secreted ~20 times the TGF-β1 released by control cells, but only cells expressing mutant TGF-β1 secreted it in the active form. Fibroblasts expressing the active TGF-β1 gene had increased levels of SMC α-actin (2-3 fold) and an enhanced ability to contract a collagen lattice. After intradermal injection into athymic mice, only those fibroblasts expressing active TGF-β1 formed “keloid-like” nodules containing collagen. These structures persisted longer than implants of control fibroblasts or fibroblasts overexpressing latent TGF-β1, but eventually regressed. Conclusions: Upregulation of TGF-β1 by fibroblasts may be necessary, but is not sufficient for excessive scarring. Needed are other signals to activate TGF-β1 and prolong cell persistence.