Transforming growth factor beta (TGFbeta) is important in inflammation, angiogenesis, reepithelialization and connective tissue regeneration during wound healing. We analyzed components of TGFbeta signaling pathway in biopsies from 10 patients with nonhealing venous ulcers (VUs). Using comparative genomics of transcriptional profiles of VUs and TGFbeta-treated keratinocytes, we found deregulation of TGFbeta target genes in VUs. Using quantitative polymerase chain reaction (qPCR) and immunohistochemical analysis, we found suppression of TGFbeta RI, TGFbeta RII and TGFbeta RIII, and complete absence of phosphorylated Smad2 (pSmad2) in VU epidermis. In contrast, pSmad2 was induced in the cells of the migrating epithelial tongue of acute wounds. TGFbeta-inducible transcription factors (GADD45beta , ATF3 and ZFP36L1) were suppressed in VUs. Likewise, genes suppressed by TGFbeta (FABP5, CSTA and S100A8) were induced in nonhealing VUs. An inhibitor of Smad signaling, Smad7 was also downregulated in VUs. We conclude that TGFbeta signaling is functionally blocked in VUs by downregulation of TGFbeta receptors and attenuation of Smad signaling resulting in deregulation of TGFbeta target genes and consequent hyperproliferation. These data suggest that application of exogenous TGFbeta may not be a beneficial treatment for VUs.