To study the role of transforming growth factor type β1 (TGFβ1) in epidermal growth control and disease, we have generated a conditional expression system by using the bovine keratin 5 promoter to drive expression of the tetracycline-regulated transactivators tTA and rTA, and a constitutively active mutant of TGFβ1 linked to the tetO target sequence for the transactivator. This model allows for induction or suppression of exogenous TGFβ1 with oral doxycycline. Maximal expression of TGFβ1 during gestation caused embryonic lethality, whereas partial suppression allowed full-term development with neonatal lethality characterized by runting, epidermal hypoproliferation, and blocked hair follicle growth. With complete suppression, phenotypically normal double transgenic (DT) mice were born. Acute induction of TGFβ1 in the epidermis of adult mice inhibited basal and follicular keratinocyte proliferation and reentry of telogen hair follicles into anagen. However, chronic expression of TGFβ1 in adult DTs caused severe alopecia characterized by epidermal and follicular hyperproliferation, apoptosis, as well as dermal fibrosis and inflammation. Readministration of doxycycline to tTA DT mice caused hair regrowth within 14 days. The mRNA and protein for Smad7, an inhibitor of TGFβ signaling, were up-regulated in the epidermis and hair follicles of alopecic skin and rapidly induced in rTA mice in parallel with the TGFβ1 transgene, suggesting that the hyperproliferative phenotype may result in part from development of a sustained negative feedback loop. Thus, this conditional expression system provides an important model for understanding the role of TGFβ1 during development, in normal skin biology, and in disease.