The effects of epidermal growth factor (EGF) on granulation-tissue formation and collagen-gene expression were studied in experimental sponge-induced granulomas in rats. After daily administration of 5 micrograms of EGF into the sponge, total RNA was extracted from the ingrown granulation tissue at days 4 and 7 and analysed by Northern hybridization for the contents of mRNAs for types I and III procollagens. EGF treatment increased procollagen mRNA, particularly at day 4. To determine whether this elevation was due to increased proliferation of collagen-producing fibroblasts or to activation of collagen-gene expression in these cells, fibroblast cultures were started from granulation tissue and treated with EGF. These experiments confirmed that EGF is a potent mitogen for granuloma fibroblasts in a dose-dependent manner. The effect of EGF treatment on radioactive hydroxyproline production in cultured cells was inhibitory. The decreased rate of collagen synthesis was also indicated by decreased amounts of procollagen mRNAs. The results suggest that the stimulation of wound healing and collagen production by EGF is due to increased fibroblast proliferation, and not to increased expression of type I and III procollagen genes.