In the present study, we assessed the role of Smad4, a component of the transforming growth factor-β signaling pathway, in cutaneous wound repair. Interestingly, when Smad4 was deleted in the epidermis, several defects in wound healing were observed in non-keratinocyte compartments. In comparison with wounded wild-type mouse skin, Smad4-deficient wounds had delayed wound closure and remodeling. Increased angiogenesis and inflammation were found in Smad4-deficient skin; these effects were exacerbated throughout the entire wound healing process. In addition, increased numbers of myofibroblasts but reduced collagen levels were found in Smad4-deficient wounds in comparison with wild-type wounds. Since Smad4 is not a secreted protein, we assessed if the above non-cell autonomous alterations were the result of molecular alterations in Smad4-deficient keratinocytes, which exert paracrine effects on wound stroma. Smad4-deficient skin and wounds had elevated levels of transforming growth factor-β1, which have been shown to induce similar phenotypes, as well as of several transforming growth factor-β1 target genes, such as matrix metalloproteinases, vascular endothelial growth factor-A, and chemokine (C-C motif) ligand 5. Furthermore, the above pathological and molecular alterations were exacerbated in skin cancer lesions that spontaneously developed from Smad4-deficient skin. Therefore, loss of Smad4 in the epidermis appears to significantly affect the microenvironment during wound healing and carcinogenesis.