Transforming growth factor-β stimulates the production of the extracellular matrix, whereas TNF-α has antifibrotic activity. Understanding the molecular mechanism underlying the antagonistic activities of TNF-α against TGF-β 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-α blocks TGF-β-induced gene and signaling pathways in human dermal fibroblasts. We showed that TNF-α prevents TGF-β-induced gene trans activation, such as α2(I) collagen or tissue inhibitor of metalloproteinases 1, and TGF-β 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-α down-regulates the expression of type II TGF-β receptor (TβRII) proteins, but not type I TGF-β receptor (TβRI), in human dermal fibroblasts. However, neither TβRII mRNA nor TβRII promoter activity was decreased by TNF-α. TNF-α-mediated decrease of TβRII protein expression was not inhibited by the treatment of fibroblasts with either a selective inhibitor of I-κB-α 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-α-mediated down-regulation of TβRII. We found that TNF-α triggered down-regulation of TβRII, leading to desensitization of human dermal fibroblasts toward TGF-β. Furthermore, these events seemed to cause a dramatic down-regulation of α2(I) collagen and tissue inhibitor of metalloproteinases 1 in systemic sclerosis fibroblasts. These results indicated that TNF-α impaired the response of the cells to TGF-β by regulating the turnover of TβRII.