The epithelium influences the mesenchyme during dynamic processes such as embryogenesis, wound healing, fibrosis, and carcinogenesis. Since TGF- modulates these processes, we hypothesized that epithelial-derived TGF- 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- 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-2 at a concentration of 50-70 pg/ml, whereas TGF-1 is undetectable. TGF-2 increases 2-3 fold following scrape injury in a dose-dependent fashion, and significantly enhances both -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. Pre-treatment of the matrix with either sirolimus (2.5 nM) or paclitaxel (10 nM) abolishes the increases in both TGF-2 and second harmonic generation in response to epithelial injury. In the absence of the epithelium, exogenous active TGF-2 (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-2 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.