This study examines the effect of transforming growth factor-β1 (TGF-β1) on the expression of Type I and II transglutaminase in normal human epidermal keratinocytes (NHEK cells). Treatment of undifferentiated NHEK cells with 100 pM TGF-β1 caused a 10- to 15-fold increase in the activity of a soluble transglutaminase. Based on its cellular distribution and immunoreactivity this transglutaminase was identified as Type II (tissue) transglutaminase. TGF-β1 did not enhance the levels of the membrane-bound Type I (epidermal) transglutaminase activity which is induced during squamous cell differentiation and did not increase Type II transglutaminase activity in differentiated NHEK cells. Several SV40 large T antigen-immortalized NHEK cell lines also exhibited a dramatic increase in transglutaminase Type II activity after TGF-β1 treatment; however, TGF-β1 did not induce any significant change in transglutaminase activity in the carcinoma-derived cell lines SCC-13, SCC-15, and SQCC/Y1. Half-maximal stimulation of transglutaminase Type II activity in NHEK cells occurred at a dose of 15 pM TGF-β1. TGF-β2 was about equally effective. This enhancement in transglutaminase activity was related to an increase in the amount of transglutaminase Type II protein as indicated by immunoblot analysis. Northern blot analyses using a specific cDNA probe for Type II transglutaminase showed that exposure of NHEK cells to TGF-β1 caused a marked increase in the mRNA levels of this enzyme which could be observed as early as 4 h after the addition of TGF-β1. Maximal induction of transglutaminase Type II mRNA occurred between 18 and 24 h. The increase in Type II transglutaminase mRNA levels was blocked by the presence of cycloheximide, suggesting that this increase in mRNA by TGF-β1 is dependent on protein synthesis.