Keratocytes of the corneal stroma secrete a unique population of proteoglycan molecules considered essential for corneal transparency. In healing corneal wounds, keratocytes exhibit a myofibroblastic phenotype in response to transforming growth factor beta (TGF-beta), characterized by expression of alpha-smooth muscle actin. This study examined proteoglycan and collagen expression by keratocytes in vitro during the TGF-beta-induced keratocyte-myofibroblast transition. TGF-beta-treated primary bovine keratocytes developed myofibroblastic features, including actin stress fibers anchored to paxillin-containing focal adhesions, cell-associated fibronectin, alpha(5) integrin, and alpha-smooth muscle actin. Collagen I and III protein and mRNA increased in response to TGF-beta. Secretion of [(35)S]sulfate-labeled keratan sulfate proteoglycans decreased markedly in response to TGF-beta. Dermatan sulfate proteoglycans, however, increased in size and abundance. Protein and mRNA transcripts for normal stromal proteoglycans (lumican, keratocan, mimecan, and decorin) all decreased in response to TGF-beta, but protein expression and mRNA for biglycan, a proteoglycan present in fibrotic tissue, was markedly up-regulated. These results show that TGF-beta in vitro induces a proteoglycan expression pattern similar to that of corneal scars in vivo. This altered proteoglycan expression occurred coordinately with transdifferentiation of keratocytes to the myofibroblastic phenotype, implicating these cells as the source of fibrotic tissue in nontransparent corneal scars.