The biological mechanism underlying steroid therapy for treating keloids remains unclear. Analytical results demonstrated that topical intra-lesional steroid injections suppress vascular endothelial growth factor (VEGF) expression in keloid tissue and induce its regression in vivo. This study investigated whether glucocorticoid (dexamethasone) downregulates VEGF expression and hinders keloid fibroblast (KF) proliferation in keloid regression. Primary KF cultures were treated with various concentrations of dexamethasone, glucocorticoid receptor (GR) antagonist (mifeprostone, RU-486), VEGF-A antibody, VEGF receptor-2 (VEGF-R2) antagonist (SU-5416), and VEGF protein. Analytical results demonstrated that dexamethasone retarded KFs proliferation. However, suppression of fibroblast proliferation by dexamethasone pre-treatment was reduced by adding exogenous VEGF protein. Dexamethasone suppressed endogenous VEGF mRNA induction, protein expressed by KFs, and angiogenesis activity detected by a tube-forming assay of human umbilical vein endothelial cells co-cultured fibroblasts. These effects were reversed by pre-treatment with RU-486, and not by pre-treatment with SU-5416. Thus, dexamethasone induces keloid regression via interaction with the GR and suppresses endogenous VEGF expression and fibroblast proliferation. However, exogenous VEGF promotes fibroblast proliferation through the GR-independent pathway. Modulation of VEGF production may comprise a valuable treatment modality for keloids.