Activin is a growth and differentiation factor that controls development and repair of several tissues and organs. Transgenic mice overexpressing activin in the skin were characterized by strongly enhanced wound healing, but also by excessive scarring. In this study, we explored the consequences of targeted activation of activin in the epidermis and hair follicles by generation of mice lacking the activin antagonist follistatin in keratinocytes. We observed enhanced keratinocyte proliferation in the tail epidermis of these animals. After skin injury, an earlier onset of keratinocyte hyperproliferation at the wound edge was observed in the mutant mice, resulting in an enlarged hyperproliferative epithelium. However, granulation tissue formation and scarring were not affected. These results demonstrate that selective activation of activin in the epidermis enhances reepithelialization without affecting the quality of the healed wound. © 2009 USCAP, Inc All rights reserved.