Transforming growth factor-beta stimulates the production of the extracellular matrix, whereas TNF-alpha has antifibrotic activity. Understanding the molecular mechanism underlying the antagonistic activities of TNF-alpha against TGF-beta is critical in the context of tissue repair and maintenance of tissue homeostasis. In the present study, we demonstrated a novel mechanism by which TNF-alpha blocks TGF-beta-induced gene and signaling pathways in human dermal fibroblasts. We showed that TNF-alpha prevents TGF-beta-induced gene trans activation, such as alpha2(I) collagen or tissue inhibitor of metalloproteinases 1, and TGF-beta signaling pathways, such as Smad3, c-Jun N-terminal kinase, and p38 mitogen-activated protein kinases, without inducing levels of inhibitory Smad7 in human dermal fibroblasts. TNF-alpha down-regulates the expression of type II TGF-beta receptor (TbetaRII) proteins, but not type I TGF-beta receptor (TbetaRI), in human dermal fibroblasts. However, neither TbetaRII mRNA nor TbetaRII promoter activity was decreased by TNF-alpha. TNF-alpha-mediated decrease of TbetaRII protein expression was not inhibited by the treatment of fibroblasts with either a selective inhibitor of I-kappaB-alpha phosphorylation, BAY 11-7082, or a mitogen-activated protein kinase/extracellular signal-regulated kinase inhibitor, PD98059. Calpain inhibitor I (ALLN), a protease inhibitor, inhibits TNF-alpha-mediated down-regulation of TbetaRII. We found that TNF-alpha triggered down-regulation of TbetaRII, leading to desensitization of human dermal fibroblasts toward TGF-beta. Furthermore, these events seemed to cause a dramatic down-regulation of alpha2(I) collagen and tissue inhibitor of metalloproteinases 1 in systemic sclerosis fibroblasts. These results indicated that TNF-alpha impaired the response of the cells to TGF-beta by regulating the turnover of TbetaRII.