Skin biopsies from seven patients with localized scleroderma (morphea) and from two healthy individuals were studied by in situ hybridization to localize the cells responsible for increased procollagen production. In scleroderma lesions, high levels of pro alpha 1 (I) and pro alpha 1 (III) collagen mRNAs were detected in some but not all fibroblasts, suggesting the presence of a subpopulation responsible for the increased collagen production. The levels of pro alpha 1 (I) and pro alpha 1 (III) collagen mRNAs in these fibroblasts were clearly elevated compared to control skin specimens hybridized at the same time under identical conditions. Most of the scleroderma samples represented intermediate stages where the fibroblasts containing elevated levels of type I and type III procollagen mRNAs were located in the papillary and upper reticular layer of the dermis. One of the scleroderma samples from an early inflammatory stage of the disease was found to contain activated fibroblasts in all dermal layers and also in aggregates adjacent to inflammatory cell infiltrates. In situ analyses were also performed on cell cultures from affected and unaffected skin of one scleroderma patient. These experiments revealed a homogeneous population of activated fibroblasts in cultures producing high levels of collagen. The results suggest that development of fibrosis in scleroderma could evolve through activation of a certain fibroblast subpopulation. During cell culturing, however, cell selection or uncharacterized regulatory mechanisms appear to modulate the behavior of these cells with respect to collagen production.