Chronic wounds are characterized by failure to heal in a defined time frame. However, the pathogenic steps leading from the etiological factors to failure to heal are unknown. Recently, increasing evidence suggests that resident cells in chronic wounds display a number of critical abnormalities, including senescence and unresponsiveness to the stimulatory action of transforming growth factor‐β1 (TGF‐β1). In this study, we have determined some of the mechanisms that might be responsible for unresponsiveness to TGF‐β1. Using Northern analysis and affinity labeling, we show that venous ulcer fibroblasts have decreased TGF‐β Type II receptor expression. This finding is not the result of genetic mutation, as shown by experiments with Type II receptor satellite instability. Decreased Type II receptor expression was accompanied by failure of ulcer fibroblasts to phosphorylate Smad 2, Smad 3, and p42/44 mitogen activating protein kinase (MAPK), and was associated with a slower proliferative rate in response to TGF‐β1. We conclude that venous ulcer fibroblasts show decreased Type II receptor expression and display abnormalities in the downstream signaling pathway involving MAPK and the early Smad pathway. These findings suggest ways to address and treat the abnormal cellular phenotype of cells in chronic wounds. © 2003 Wiley‐Liss, Inc.