The epithelium influences the mesenchyme during dynamic processes such as embryogenesis, wound healing, fibrosis, and carcinogenesis. Since transforming growth factor-beta (TGF-beta) modulates these processes, we hypothesized that epithelial-derived TGF-beta also plays a critical role in maintaining the extracellular matrix at basal conditions. We utilized an in vitro model of the epithelial-mesenchymal trophic unit in the human airways to determine the role of epithelial-derived TGF-beta in modulating the extracellular matrix under basal and wound-healing conditions. When differentiated at an air-liquid interface, the human bronchial epithelium produces active TGF-beta2 at a concentration of 50-70 pg/ml, whereas TGF-beta1 is undetectable. TGF-beta2 increases two- to threefold following scrape injury in a dose-dependent fashion and significantly enhances both alpha-smooth muscle actin expression in the underlying collagen-embedded fibroblasts and secretion of tenascin-C into the matrix. Multiphoton microscopy demonstrates substantially enhanced second harmonic generation from fibrillar collagen in the matrix. Pretreatment of the matrix with either sirolimus (2.5 nM) or paclitaxel (10 nM) abolishes the increases in both TGF-beta2 and second harmonic generation in response to epithelial injury. In the absence of the epithelium, exogenous active TGF-beta2 (0-400 pg/ml) produces a biphasic response in the second harmonic signal with a minimum occurring at the epithelial-derived basal level. We conclude that epithelial-derived TGF-beta2 is secreted in response to injury, significantly alters the bulk optical properties of the extracellular matrix, and its tight regulation may be required for normal collagen homeostasis