Excessive accumulation of fibrillar collagens is a hallmark of the cutaneous fibrosis in both systemic and localized scleroderma. Turnover of the collagenous extracellular matrix is dependent on the balance between collagenolytic matrix metalloproteinases and their specific inhibitors. We have examined the expression of the novel, matrix associated tissue inhibitor of metalloproteinases-3 (TIMP-3) in normal and scleroderma skin fibroblasts in culture and in vivo. The levels of TIMP-3 mRNA were elevated up to 2.5-fold in five of seven systemic sclerosis fibroblast strains, whereas TIMP-1 mRNA expression was elevated up to 1.8-fold in two and TIMP-2 mRNA expression up to 1.8-fold in two systemic sclerosis strains. Using in situ hybridization, TIMP-3 mRNA was detected in seven of 12 localized scleroderma skin samples, specifically in fibroblasts within fibrotic collagen fibers or in the vicinity of inflammatory cells. TIMP-1 mRNA was detected in three of eight scleroderma skin samples in fibroblasts adjacent to inflammatory cells. The expression of TIMP-3 mRNA by systemic sclerosis and normal skin fibroblasts was enhanced to a similar extent (by 8.6- and 8.1-fold, respectively) by transforming growth factor-beta, and suppressed down to 34 and 54%, respectively, by tumor necrosis factor-alpha. Specific activation of TIMP-3 gene expression in scleroderma skin fibroblasts in culture and in vivo suggests a role for TIMP-3 in the pathogenesis of dermal fibrosis via inhibition of turnover of fibrotic dermal extracellular matrix, possibly due to upregulation of TIMP-3 expression by transforming growth factor-beta.