Cutaneous wound repair requires the de novo induction of a specialized form of fibroblast, the alpha-smooth muscle actin (alpha-SMA)-expressing myofibroblast, which migrates into the wound where it adheres to and contracts extracellular matrix (ECM), resulting in wound closure. Persistence of the myofibroblast results in scarring and fibrotic disease. In this report, we show that, compared with wild-type littermates, PKCepsilon-/- mice display delayed impaired cutaneous wound closure and a reduction in myofibroblasts. Moreover, both in the presence and absence of TGFbeta, dermal fibroblasts from PKCepsilon-/- mice cultured on fibronectin show impaired abilities to form ;supermature' focal adhesions and alpha-SMA stress fibers, and reduced pro-fibrotic gene expression. Smad3 phosphorylation in response to TGFbeta1 was impaired in PKCepsilon-/- fibroblasts. PKCepsilon-/- fibroblasts show reduced FAK and Rac activation, and adhesive, contractile and migratory abilities. Overexpressing constitutively active Rac1 rescues the defective FAK phosphorylation, cell migration, adhesion and stress fiber formation of these PKCepsilon-/- fibroblasts, indicating that Rac1 operates downstream of PKCepsilon, yet upstream of FAK. These results suggest that loss of PKCepsilon severely impairs myofibroblast formation and function, and that targeting PKCepsilon may be beneficial in selectively modulating wound healing and fibrotic responses in vivo.