Transforming growth factor-β (TGF-β) is a multifunctional growth factor involved in all aspects of wound healing. TGF-β accelerates wound healing, but an excess of its presence at the wound site has been implicated in pathological scar formation. Our group has recently identified CD109, a glycophosphatidylinositol-anchored protein, as a novel TGF-β coreceptor and inhibitor of TGF-β signaling in vitro. To determine the effects of CD109 in vivo on wound healing, we generated transgenic mice overexpressing CD109 in the epidermis. In excisional wounds, we show that CD109 transgenic mice display markedly reduced macrophage and neutrophil recruitment, granulation tissue area, and decreased Smad2 and Smad3 phosphorylation, whereas wound closure remains unaffected as compared with wild-type littermates. Futhermore, we demonstrate that the expression of the proinflammatory cytokines interleukin-1α and monocyte chemoattractant protein-1, and extracellular matrix components is markedly decreased during wound healing in CD109 transgenic mice. In incisional wounds, CD109 transgenic mice show improved dermal architecture, whereas the tensile strength of the wound remains unchanged. Taken together, our findings demonstrate that CD109 overexpression in the epidermis reduces inflammation and granulation tissue area and improves collagen organization in vivo.